FOX Sports’ China Legal will be the site of a blockbuster lawsuit between a billionaire and a Chinese bank.
As we’ve reported previously, the bank is seeking millions of dollars in damages for allegedly defrauding Chinese investors through bogus accounts.
The suit alleges that the bank failed to provide investors with adequate disclosure about accounts it was selling to foreign entities, and in fact engaged in a variety of shady practices, including selling loans to a bank that was allegedly owned by a criminal group and that was linked to the government of the day.
This was the case for more than a decade, and it wasn’t the first time that China Legal had faced legal trouble.
The bank has also been embroiled in an ongoing legal battle with its former chief, Li Yongsheng, who is facing a massive fraud case stemming from the company’s purchase of the assets of a failed real estate investment fund in 2011.
In September, the company agreed to pay a $1.6 billion fine to settle a similar case.
Now, the lawsuit filed this week seeks to force the bank to pay $6.5 billion in damages.
The lawsuit alleges that Li has taken more than $4 billion from his company in cash, through his investment vehicles, and through his company’s stock, which has suffered substantial losses.
The plaintiffs argue that the money was stolen through the bank’s sale of banknotes to other investors, which violated Chinese law.
Li is the founder and CEO of Li Tongsheng Group, a bank with branches in more than 30 countries.
In 2015, Li and Li’s business empire took a large step forward when it acquired a number of Chinese banks, including HSBC Holdings Plc and Beijing Huayu Bank.
In the wake of the HSBC acquisition, China Legal became the world’s largest bank in terms of deposits, holding $18.3 trillion.
It is now the second-largest bank in the world, according to data compiled by Bloomberg.
Li was reportedly the first to announce plans to sell his bank to his private equity fund, the China National Investment Corporation (CNIIC), in 2016, but the deal collapsed amid accusations that Li had manipulated the company and manipulated the CNIIC’s finances.
The company eventually sold the assets to Hong Kong-based UBS AG.
Li also founded Li Tongse Holdings Group in 2011 and became CEO in December 2015.
He is now facing criminal charges in China, where he was arrested in June for allegedly violating a criminal investigation, according a Reuters report.
The allegations of fraud against Li are not the only thing that have caused controversy at China Legal.
In May, Bloomberg reported that China Law had a reputation for its poor compliance with regulations.
In an internal review of its compliance practices, a senior executive told the news agency that China legal had been a “failure in compliance with all relevant regulatory requirements.”
In May 2017, China Law admitted that it had lost at least $1 billion in assets due to the bank selling its assets to Chinese investors.
At the time, the Wall Street Journal reported that the loss could have been more than twice as large.
Li and China Legal were among the companies that went bankrupt due to fraud in the wake the Global Financial Crisis in 2008.
China Law’s stock fell more than 5 percent during the period, with investors fleeing the bank and its former CEO.