Guy Hands has been accused of changing his story about events in 2007, when he claims Citigroup misled him over a £4.2bn bid for music group EMI.
A lawyer for Citi – which is fighting a £1.5bn claim by Hands’s private equity firm Terra Firma – asked the financier in the high court in London on Thursday whether he wanted to abandon some of his evidence about a meeting in May 2007, just before the bid for EMI was announced.
Hands, accused by Citi’s lawyer Mark Howard QC of having a “hazy memory”, declined to do so.
Howard asked Hands about the “gross discrepancies” between evidence being heard in London and that previously presented by US lawyers in 2010 to a New York court, where a jury rejected Hands’s fraud claim. He told him the account was “all over the place” and had been changed since the first case in New York.
Terra Firma accuses Citi of making fraudulent misrepresentations – allegedly by three then-senior Citi bankers, including David Wormsley, who remains at the bank but at the time was head of UK banking.
The takeover of EMI took place just before the credit crunch and Citi – which lent Terra Firma £2.5bn to fund the deal – took control of the business in 2011. Citi also advised EMI on the sale.
One of the arguments being pursued by Terra Firma is that Wormsley told Hands there was a rival bid for EMI and that to clinch the deal a bid needed to be tabled at 265p a share.
Howard used the second day of Hands’s questioning to examine the days before the bid was made in late May 2007 and to test the financier’s assertion that Wormsley had told Terra Firm the bid should be at that price.
“You had a confusion in your mind about where the 265[p] came from and you have sought subsequently to attribute it to Mr Wormsley … The truth slips out. That is the truth,” said Howard.
“No, it’s not,” said Hands.
It was “something you had made up subsequently,” said Howard. Hands denied this.
Howard said during later questioning: “The problem is, Mr Hands, your story is shifting and it is impossible to reconcile these different versions.”
The Citi QC read out Hands’s diaries from 6 May 2007, which listed a meeting at 10am in the sitting room of the Woodlands hotel – which Howard said was owned by Hands’ wife – and an entry about a birthday barbecue for his daughter. The 10am meeting was with the then EMI boss Eric Nicoli and Howard asked if this was when the price of 265p was discussed.
Howard said the situation was no different from the “false claim” that Hands had tabled against the former Citi chief executive Chuck Prince, who had been named in an earlier court filing but removed for this case.
Terra Firma’s case also includes allegations about Michael Klein, who was head of global banking at Citi, and Chad Leat, who was Citi’s co-head of global credit markets. Citi denies it made any dishonest statements to Hands or Terra Firma throughout the auction process for EMI. The case is expected to continue until mid-July.
