Lex Greensill Testifies About ‘Code of Silence’ Regarding Softbank Transaction

Lex Greensill testified in the High Court about a “code of silence” surrounding a controversial deal that is central to a $440 million legal dispute.

Credit Suisse has initiated legal action against the Japanese technology investment firm Softbank, seeking compensation for losses associated with Greensill’s finance company, which collapsed in 2021 amid a financial and lobbying scandal.

The fall of Greensill Capital has led to numerous lawsuits and investigations. Its failure prompted Credit Suisse to close $10 billion worth of funds related to the firm, which also contributed to a state-backed bailout of the Swiss bank by UBS Group in 2023.

This intricate civil case where Lex Greensill is testifying involves funds that Greensill had lent to Katerra, a construction company backed by Softbank.

Credit Suisse alleges that Greensill, at Softbank’s request, relinquished rights to Katerra’s debts in exchange for equity, consequently putting Credit Suisse at a financial disadvantage. This arrangement occurred in 2020, prior to Greensill’s downfall in 2021. UBS is pursuing the recovery of funds for former clients of Credit Suisse.

During his first public court statement since the collapse of his company, the 48-year-old Greensill described the restructuring of the relationship with Katerra as “painful,” indicating it aimed to allow Softbank to structure the deal in a way that would not be reflected on the profit and loss statement.

Softbank contends that the lawsuit is baseless and represents an effort by Credit Suisse to redirect the responsibility for losses caused by their own mismanagement and risk-taking.

Greensill Capital’s downfall occurred after insurers withdrew their coverage. Although positioned in the supply chain finance sector, the company solicited investments for what were supposed to be low-risk, short-term loans. However, many of these loans turned out to be high-risk, long-term commitments, with billions still owed.

During David Cameron’s administration, Greensill received office space in Downing Street, and the business benefited from government pandemic financing schemes. Recent reports indicated that the Insolvency Service plans to seek Lex Greensill’s disqualification from managing UK businesses, a claim he rejects as he fights against the government’s efforts to bar him from corporate governance.

While serving as a witness in a two-day testimony within a month-long trial in London, Greensill mentioned that senior executives at Softbank “felt threatened” by his connections with Masayoshi Son, the founder of the investment firm, which had invested heavily in Greensill Capital.

Greensill noted he frequently traveled to Tokyo—”often weekly”—for personal mentoring sessions with Son, whom he referred to as “Son-san”.

Recently, allegations surfaced that Greensill had expressed that his company had been severely mistreated by Softbank. Rajeev Misra, formerly leading a Softbank fund, characterized Greensill as “slippery and prone to lying” in correspondence revealed during the proceedings.

In addition, Lex Greensill is pursuing legal action against the government over its management of the inquiries into his conduct, while Greensill’s UK administrators are litigating against him and other executives for purported breaches of fiduciary duty.

The trial is ongoing.