Landmark €1 billion case against Banque Paribas filed in Malta

Landmark €1 billion case against Banque Paribas filed in Malta

Jacob Agam believes the bank’s actions were prompted by anti-Semitism.

A multi-millionaire has accused BNP Paribas with anti-semitism and criminal acts, opting to file the case in Malta, where he claims hundreds of millions of euro were compromised by the bank’s actions.

Briton Jacob Agam – who resides in Malta, among other countries – and his  private equity investment company Vertical Group Holding are taking action not only against the bank – but also against its chairman Jean Lemierre, CEO Jean-Laurent Bonnafe’ and bank legal counsel Valerie Lafarge-Sarkozy.

He is claiming that their actions had affected his  and his company’s reputation, resulting in “huge material damages of as much as €1 billion in several financial and investment operations” because of attacks on his financial standing. He also said that Vertical Group Holding had seen projects suspended, which would have generated “several hundreds of millions of euros of profits”, which were destined for major investment opportunities in Malta and elsewhere.

Lawyer Pio Valletta, who filed the lawsuit on Friday on behalf of Mr Agam and his company Vertical Group Holding, said this was not a simple case of defamation and breach of banking fiduciary duties, but involved “a pattern of anti-Semitic acts, actions, statements and criminal behaviours which stem from the respondent bank’s and its officers’ perennial and proven racial and anti-Semitic disposition”.

The clash between Mr Agam and the bank started in 2013, when he challenged the bank’s position after hearing about allegations that it was supporting terrorist organisations in Iran, which were actively trying to undermine his home state of Israel. Mr Agam, who served in the Israel military as a member of a special elite force to combat terrorist organisations, had said it would be impossible for his family to retain links with the bank in these circumstances.

The allegations were later proved: in 2014, BNP Paribas had pleaded guilty to criminal charges and paid $9 billion after it was found to have continued to do business with countries under American sanctions over a 10-year period.

As proof of its anti-Semitic stance, he also said that in 2016, it had made a $40 million settlement after a Jewish employee was fired after he complained about being forced to sit through a training film that depicted Hitler and other Nazi imagery in “a positive manner”.

In June 2010, he was canvassed by the bank to become its client, with multimillion assets being placed in its Singapore branch, which he said was done in order for the bank to avoid taxes in France.

Mr Agam and two of his companies were given facilities amounting to €27.5 million, which were fully repaid, while the third company – Vertical – had €10 million in its account, without any facility.

After the clash in 2013, the bank commenced what was described as a « series of illegal actions contrary to contractual and statutory regulations to terminate the banking relationship» with the Agams, which he said were intended to “destroy his assets and his and his family’s good names”.

In a nutshell, the bank claimed that the facilities granted to one of his companies was in default and demanded full payment of €20 million within 10 days, without giving any justification for its decision. Mr Agam later found out that the action was taken after one of his properties was targetted by a French court, in a case which was subsequently dropped.

Mr Agam said that in February 2014, the CEO of the Singapore bank met him in Paris and Mr Agam agreed to terminate the banking relationship as long as the bank continued to honour its facilities to his sister. He repaid €20.2 million but the bank insisted on repayment of a further €6.2 million granted to another of his companies – which was not in arrears – with payment deferred till the end of 2014.

However, the story did not end there and in 2015, the bank terminated the negotiations and commenced proceedings in Singapore and France to enforce the personal guarantees given by Jacob and Ruth Agam for her companies, escalating this to foreclosure proceedings against her properties in 2016.

The plight of the Agam family prompted four banks to come forward, offering help to settle the outstanding loans, but their approach was rebuffed by BNP Paribas.

Mr Agam claimed that Dr Lafarge-Sarkozy said in December 2015 that “she was instructed to destroy the Agam family’s name, in particular Jacob’s, his reputation, business, companies and assets and to take everything that they possessed in France from cars, arts to the furniture, and that she will be happy to do so”.

He claims that at one point during legal proceedings, she referred to the siblings as “ces gens-la” (“these people”) – a phrase which the French Supreme Court had previously ruled as being anti-Semitic – and “parasites” lounging around in luxurious estates “living at the expense of the bank and part of an international financial world”.

In July 2017, Ruth Agam and her companies filed a claim in the Tel Aviv district court against the bank, alleging multiple violations inspired by anti-Semitic motives, while in Singapore, Jacob Agam tried a different tack, and challenged the validity of a merger between the bank and its private banking French subsidiary. In May 2016, the Supreme Court of Singapore – which he said was chaired by the former lawyer of the bank and the former legal partner of its current legal representative in Singapore – re-affirmed the legality of the merger but did not address the various commercial disputes between the Agams and the banks.

landmark e1 billion case against banque paribas filed in malta - Landmark €1 billion case against Banque Paribas filed in Malta

The case drew media attention, and one of the subsequent articles in the The Straits Times claimed he was “trying to wriggle out of his financial obligations” – which he claims was defamatory and did his reputation untold damage, prompting queries from other media as well as the banks and others persons and entities with whom he and his companies were conducting or were about to conduct investment transactions.

The chairman, CEO and legal counsel were brought into the case because of their “failure to act”, which Mr Agam said was tacit approval of what the bank had done.

The company and Mr Agam reserved the right to bring forward a claim for damages.

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