A PROPERTY tycoon is planning to sue Royal Bank of Scotland over rate rigging, claiming it hurt a deal to buy Santander’s Madrid headquarters.
Glenn Maud, a lawyer turned property investor, is taking the state-backed lender and others to court seeking €1bn (£720m) that his company paid, or will have to pay, on an interest rate swap.
Maud and Derek Quinlan, the Irish financier, bought the freehold from Santander in 2008. The two men had built an empire fuelled with cheap loans, mostly from Royal Bank of Scotland (RBS). They paid big prices for trophy assets such as Citigroup’s skyscraper in Canary Wharf. The Santander purchase was Europe’s biggest property deal at the time.
If Maud is successful in his High Court action, it could open the door to similar suits from clients that bought mortgages and loans from RBS at the time of the rate rigging.
RBS said there is no merit to the claim, which it is defending vigorously.
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Marme Inversiones, a vehicle controlled by Maud, bought the interest rate swap to fund the Santander acquisition. The deal, like all contracts of its kind, was valued on the basis of Euribor — the rate for lending between European banks. RBS has since been fined for its involvement in manipulating the market during the period in question.
It is thought that Maud is seeking to tear up the contract, arguing that it was based on fraudulent misrepresentation. Under English law the court recognises the validity of contracts only if both parties have made them with clean hands.
The legal action is one of the biggest yet in the investigations into the global conspiracy to manipulate benchmark rates.