VALLETTA, Malta--(BUSINESS WIRE)--BNP Paribas’ CEO and Chairman have been ordered to appear before a Maltese court, where they face questions about the French bank’s alleged involvement with a highly controversial deal in Malta, and about serious alleged ethical, legal and professional violations at the bank, Vertical Group Holding announces today.
Jean-Laurent Bonnafé and Jean Lemierre, two of France’s highest-profile executives, will be pressed to give evidence as witnesses in court concerning their roles in an alleged plot by BNP Paribas to discredit a financier of British-Israeli background who had criticized the bank over its admitted involvement in multiple criminal activities, including money-laundering for pariah regimes.
Jacob Agam, alongside Malta-based Vertical Group, the international private equity group he chairs, is bringing a civil lawsuit against both men and BNP itself for what he alleges was the bank’s deliberate and unlawful destruction of the business’s assets. BNP and the executives dispute the claim.
Agam alleges he was targeted by the bank after raising concerns publicly and privately about its role in a number of controversies. These included a 2014 criminal conviction imposed on BNP by the US Government for unlawfully processing transactions worth billions of dollars for sanctioned regimes linked to terrorism and genocide.
In an unusual development for a front-ranking French company, Bonnafé and Lemierre were summoned to give witness evidence at a hearing next month, after Vertical secured a court summons against them. Bailiffs served the summons on them at the €41bn bank’s Paris headquarters in September. It is one of the first times since the Global Financial Crisis that a major bank’s top executives, rather than lower-ranking officials, will be obliged to give public witness-box evidence in civil proceedings.
The legal action brought by Vertical and Agam makes pathfinding use of a 2012 European Union Directive, which enables a resident or company of one EU member state to use its home court to sue defendants elsewhere in the EU. Bonnafé and Lemierre have been informed by the court that they will be in contempt of court if they disobey the summons and fail to appear before the Honourable Joseph Zammit McKeon, the presiding judge, at the Courts of Justice Building in Valletta, Malta, on November 3.
The summons, which cannot be appealed, is the culmination of protracted efforts to get the BNP bosses to court, after previous summonses were not observed. The court has informed Bonnafé and Lemierre it may issue an arrest warrant for them if they do not attend.
Although the pair can choose whether or not to give evidence in relation to their status as defendants in the case, under civil court rules they are obliged to give evidence as witnesses in matters relating to the bank’s alleged role.
The November hearing’s principal purpose is to hear evidence about whether the Maltese court has jurisdiction over the case. BNP has previously argued it should not be heard in Malta, and has claimed it has no business there.
Bonnafé and Lemierre will be questioned closely on this claim, which appears to contrast with recent reports identifying BNP as part of a financing syndicate for Electrogas, a power station company dogged by extreme controversy in Malta. The company’s former director Yorgen Fenech has been charged with conspiracy to murder Daphne Caruana Galizia, the journalist assassinated in 2017, which he denies. There is no suggestion of any link between Caruana Galizia’s death and BNP.
A connection between BNP and Electrogas was first asserted in court testimony provided by Agam at an earlier hearing in February 2020. In a separate complaint, France’s National Financial Prosecutor’s Office has been asked to investigate BNP’s deal with Electrogas by the Daphne Caruana Galizia Foundation, an anti-corruption NGO named after the murdered reporter. She was killed after investigating business practices at Electrogas and elsewhere.
Bonnafé and Lemierre will also face calls to give evidence about their alleged personal involvement in decisions made within BNP that allegedly caused the unwarranted destruction of Agam’s and Vertical’s business interests. The defendants are accused of retaliating with a smear campaign against Agam and Vertical Group, in breach of defamation and banking laws.
Agam, who is of British-Israeli background with a Jewish heritage, and had been a longstanding client of BNP, claims the bank abruptly terminated his companies’ investment facilities, sought to seize his family’s properties, and defamed him in the media, with the knowledge of the CEO and Chairman. The bank’s legal representative also used antisemitic and derogatory language, calling Jews “parasites”, according to the lawsuit. Agam claims the bank’s leadership failed to take any action to investigate, mitigate or apologise for this and other alleged episodes, despite repeated requests to do so, and accuses them of presiding over anti-semitic practices.
Agam and Vertical claim the alleged campaign against his interests started after he raised concerns with BNP following a number of major public scandals involving the bank. In 2014, BNP pleaded guilty to two criminal charges and agreed to pay almost $9 billion to resolve accusations it violated US sanctions aimed at thwarting brutal regimes in Iran, Sudan and elsewhere. Separately, BNP reached an out-of-court settlement in New York in 2016 with a Jewish employee who claimed he was penalized for complaining about a training film that featured a frivolous portrayal of Hitler and Nazi imagery.
The bank and the other defendants reject the allegations brought in the lawsuit by Agam and Vertical. They deny the existence of a plot against the claimants and say the claims of antisemitism are conjectures by the claimants which are denied.
Jacob Agam said: “I hope these hearings will bring to an end the bank’s lengthy efforts to shield itself and its management from questions they will deservedly find very unpleasant and difficult. Dealing with BNP has been a far more unpleasant and difficult experience for me, my family and my business. My claim is that the bank’s actions against me were partly motivated by racial bigotry and antisemitism. This has been especially hard to live with given BNP’s admitted criminal and unethical behaviour in the recent past.
“BNP is, quite literally, a scandalous organisation. Bonnafé and Lemierre have presided over those scandals. So it is shocking they have never been held personally responsible for the bank’s misconduct - even when the bank settled a lawsuit over alleged antisemitism, or was fined billions of dollars for financial transactions that assisted terrorism and genocide.
“Neither the bank nor its leaders should be allowed to escape the consequences of this horrendous conduct. Now, at last, the corporate veil has been drawn back. For the first time, the CEO and Chairman will be put under the spotlight, required to explain BNP’s controversial involvement in Malta, and to justify its previous claim that it did no business there. Its business in Malta is nothing to be proud of, to judge from its partnership with Electrogas.
“I also want them to face searching questions about their alleged personal involvement in the destruction of my family assets.”
Dr Pio Valletta of Farrugia, Gatt & Falzon, Maltese attorney for Mr Agam and Vertical Holdings, added: “This is an important test-case regarding the applicability of European Union rules. It demonstrates that nobody can escape from their statutory duties, not even a mighty organisation like BNP and its management. The recent ruling of the Maltese Court reaffirms the fundamental principle that ‘be you ever so high, the law is above you’. Messrs Bonnafé and Lemierre may preside over the world’s eighth-largest bank. But they and the bank must still submit to a serious examination of their actions before the court.”
Hearings are scheduled to begin at 11am CET on November 3 before the Honourable Mr Justice Joseph Zammit McKeon on the second floor of the Courts of Justice Building, Valletta, Malta. The case is Vertical Group Holding and oth v BNP Paribas SA and oth, The case number is 218/2019 JZM.
Notes for editors
About the litigation
BNP Paribas, its Chairman Jean Lemierre, CEO Jean-Laurent Bonnafé and the bank’s legal representative Valérie Lafarge-Sarkozy are the subjects of a lawsuit filed on behalf of Jacob Agam and Vertical Group Holding Ltd (“Vertical Group”) in Malta on March 1, 2019. The bank and other defendants are accused of defamation and violation of banking laws, and of conducting a smear campaign that severely damaged the claimants’ business interests, professional reputation and credit standing. The bank’s alleged actions stemmed from a dispute between the parties, it is claimed, which arose after Agam persistently challenged the bank from 2014 over its admitted involvement in criminal acts, including US sanctions-busting and facilitating transactions with regimes involved in attacks on the State of Israel.
According to the lawsuit, the bank targeted Agam by abruptly terminating his companies’ investment facilities without justification and attempting to seize family properties. It is also alleged Lafarge-Sarkozy used anti-semitic language, referring to Jews as “ces gens-là” (“these people”, a highly derogatory phrase in the French language) and “parasites”. The bank’s CEO and Chairman, despite receiving many personal requests to intervene, failed to prevent the alleged destructive smear campaign against the claimants, according to the legal claim. It is also alleged that the CEO did not respond to a formal letter from members of Israel’s parliament, expressing concerns about the case.
The bank disputes all the allegations brought in the lawsuit by Agam and Vertical. It says the claims of antisemitism are conjectures by the claimants which are denied.
The legal claim states that the claimants have honoured all their financial obligations to the bank, and that the bank has acknowledged this.
About Vertical Group Holding and Jacob Agam
Vertical Group Holding is a private equity company, headquartered in Malta, that makes investments across a range of sectors and geographies, with an active involvement in the management and development of portfolio companies. Over nearly three decades, its investee companies have created and enjoyed equity valuations totalling more than €3.5bn. Its current portfolio includes companies in the US, Israel and across Europe, in software, healthcare, media, gaming, renewable energy, food, robotics and other industries.
Vertical is owned by Jacob Agam and was founded in 1991. After a career in the Israeli military and as a diplomat for Israel, Jacob Aram trained as a lawyer in New York, working for a Wall Street firm before founding Vertical in 1991.
Agam currently serves on the boards of several companies and is a significant philanthropist, having supported charities fighting poverty and illiteracy in Africa, medical research, and the archaeological preservation of early Jerusalem. He also helped fund the Peres Center for Peace NGO in Tel Aviv.
Further information is available at www.verticalcapital.biz.
Earlier litigation involving BNP Paribas
Headquartered in Paris, and with operations in more than 70 countries and approximately 200,000 employees globally, BNP Paribas is one of France’s leading corporate institutions and the eighth-largest banking group in the world by market value. With a history stretching back to the 1840s, BNP Paribas is a constituent of the CAC 40 index, and has a current market capitalization of €41 billion. The group is active in retail banking, corporate lending, investment banking and asset management across five continents.
In 2014, BNP Paribas accepted a record-breaking $9bn fine from the US Department of Justice after pleading guilty to flouting America’s sanctions regime by facilitating transactions for regimes that support terrorism. The bank admitted that between at least 2004 through 2012, it knowingly and wilfully moved over $8.8bn through the American financial system on behalf of Sudanese, Iranian and Cuban sanctioned entities, in violation of US economic sanctions. BNP Paribas also admitted falsifying business records, and was roundly condemned by US prosecutors. The bank is reportedly also facing legal action brought in France on behalf of victims of the Darfur genocide, alleging BNP Paribas is complicit in crimes against humanity.
The US Government’s announcement of the fine and criminal conviction against BNP Paribas can be viewed at https://www.justice.gov/opa/pr/bnp-paribas-agrees-plead-guilty-and-pay-89-billion-illegally-processing-financial.
In 2016, the bank reached an out of court settlement in New York with Jean-Marc Orlando, an Orthodox Jew who had worked as a managing director for BNP Paribas North America. Orlando claimed the bank fired him for his religious beliefs after he complained about Nazi imagery in a training video. The video, created by BNP employees, was a parody of the 2004 film Downfall, which depicted the final days of Adolf Hitler’s Nazi regime in Germany, he claimed. The film portrayed the head of BNP competitor Deutsche Bank as Hitler, the lawsuit said. BNP did not admit liability as part of the settlement.