An Indian property firm suing Deutsche Bank AG sought permission to add accusations of interest-rate rigging to its lawsuit over a swap agreement.
“Material has come to light which shows that Deutsche Bank AG has been involved in the manipulation of Libor,” Unitech Ltd. said in documents for the two-day hearing that started in a London court today. The company said it wouldn’t have signed loan or swap documents had it known about rate rigging.
Germany’s largest bank sued New Delhi-based Unitech last year saying it owed $11 million under an interest-rate swap and had missed payments. Deutsche Bank and a consortium of other lenders also sought to enforce a $150 million loan, while Unitech countersued claiming the swap wasn’t suitable or properly explained.
It’s the second time a plaintiff in a U.K. lawsuit has sought to use rate-manipulation allegations in a case over swaps that turned out to be costly. Affiliates of Guardian Care Homes Ltd. won permission in October from Judge Julian Flaux to accuse Barclays Plc of benefiting from its attempts to fix the benchmark. About $300 trillion of contracts worldwide are tied to the London interbank offered rate.
Unitech’s “unfounded allegations about Libor are an attempt to divert attention from its unpaid debt,” said Kathryn Hanes, a spokeswoman for the Frankfurt-based lender.
Deutsche Bank and more than a dozen other lenders are being investigated by regulators worldwide over rate rigging. Germany’s largest bank has suspended seven employees so far and is under pressure to release results of an internal probe into Libor submissions. It hasn’t been censured by regulators.
Barclays, UBS AG and Royal Bank of Scotland Group Plc have been fined more than $2.5 billion by regulators investigating the scandal.
Richard Gwynne, Unitech’s lawyer, didn’t immediately respond to e-mails seeking comment.
The case is: Deutsche Bank AG v. Unitech Limited, High Court of Justice, Queen’s Bench Division, 12-464