Property boss launches £1.5bn legal claim against Lloyds over Libor hit
The former Centre Point owner has tabled a £1.5bn legal claim against Lloyds Banking Group, pointing to the Libor scandal as reason for his property firm’s woes.
Founder of property investment firm Targetfollow, Ardeshir Naghshineh, said he would have never taken out certain loans if he had knowledge of the Libor benchmark being manipulated fraudulently.
According to The Times newspaper, Naghshineh is pursuing compensation regarding the insolvency of two Targetfollow entities in 2011.
It comes after the companies collapsed after taking out hefty loans worth hundreds of millions alongside interest rate derivative products that were benchmarked to Libor.
The firms boasted a combined portfolio of 27 properties for investment or development, including Centre Point and the City’s 70 St Mary Axe.
Naghshineh claims that the company would not have entered into HBOS loans if it had not been for “breaches of duty and misrepresentations”. Such misrepresentations include a suggestion that the Libor-linked derivatives were “good value.”
In a statement given to The Times, Lloyds said: “We do not believe the claim has merit. The parties entered into a settlement more than a decade ago in relation to the same banking products that are subject to this claim.
“We view the total damages sought in the claim as lacking any credibility, with less than half of the total value explained in any detail in the claim.”
Banks had lied about the interest rates they were paying to borrow during the financial crisis, giving an inaccurate sense of stability.
Lloyds was hit with a £105m fine in 2014 by the City watchdog, the Financial Conduct Authority (FCA), for serious failings over Libor.