Billionaire Alexander Vik, making art, wine and new tech his business
Alexander Vik / Photo all rights reserved
The Monegasque resident seems to have a flair for business, whether it’s wine or the internet.
A very long legal tug-of-war seems to have come to a close in June. The Supreme Court of the United Kingdom ruled in favour of Monegasque resident and Swedish-Norwegian businessman Alexander Vik in his dispute with Deutsche Bank.
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The statute of limitations established by the Limitation Act 1980, a major piece of UK legislation, means that while Alexander Vik must pay the interest he owes the bank, he will only do so in respect of the last six years. As Landmark Chambers points out, this is the outcome of ten years of legal proceedings between the businessman and the bank.
How did the dispute arise? Who is Alexander Vik? This is the man who Forbes magazine dubbed in 2014 “the most interesting man in the world (as long as doesn’t owe you money)”.
The internet bubble
Born in Stockholm in 1955, Alexander Vik spent most of his childhood in Sweden, continuing his education in the Canary Islands and then at the prestigious Harvard University in the USA, where he also excelled at golf, winning a number of championships.
Born into a wealthy family of entrepreneurs and fur traders, he worked for a time on Wall Street, and more specifically for the infamous Lehman Brothers investment bank, whose collapse in 2008 precipitated the subprime crisis.
However Alexander Vik had left the firm well before that time, to carry out his own property transactions and start up an insurance company.
Sensing the internet’s strong potential, Alexander Vik set up his Xcelera.com company in the 1990s. It was a huge success: riding on the wave of the dotcom bubble, the company holds the record for the highest increase in value in a single year. And what a record: according to the press, its value rose by 74,000% to 113 billion kroner, ahead of major companies such as Volvo.
After selling his shares in the company, which went bankrupt shortly afterwards, Alexander Vik acquired a number of different companies and, most importantly, set up the Sebastian Holdings investment fund, named after his son, as revealed by Les Echos.
Art and Wine, the Vik couple’s shared interests
Fortune certainly seemed to favour the businessman, who had previously been very lucky to survive an avalanche in 1997. Alexander Vik soon settled in Monaco with his wife Carrie, who he met at Harvard, and their four children.
The couple, who are passionate about art and wine, bought 4,400 hectares of land in Chile to create a wine estate. As they told our colleagues at Monaco Life in 2021, their aim was to produce the best wine in South America. “The idea of [our] holistic wines is purity, sustainability, exceptional quality and doing everything we can to assist the vines to naturally produce the very best grapes they can. Cristian Vallejo, our wonderful winemaker, then assists that exceptional fruit to naturally express itself in the wine,” they said.
And once again, they met with success. An article published by Sotheby’s the auctioneers, revealed that in 2022, the Vik estate was considered the fourth best vineyard in the world by William Reed Business Media. Two years previously, Wine Enthusiast also dubbed it the “best wine experience in the world.”
The vineyard is part of the small luxury hotel group founded by the couple: Vik Retreats. Altogether, six boutique hotels have been launched across Chile, Uruguay and Italy. Each room is decorated with fabulous works of art, carefully selected by Alexander and Carrie Vik, who also own an art gallery in Milan. “We probably met 200 artists that we personally went to visit at their studios, looked at all their work and spoke to them. We’re not just buying art, we are collaborating and creating art,” Carrie Vik told Sotheby’s.
Alexander Vik was also hit by the 2008 crisis
Unfortunately for Alexander Vik, the Sebastian Holdings Investment Fund soon found itself in difficulties. This was in 2008, as a result of the famous subprime crisis we mentioned previously.
The company, which was registered with Deutsche Bank, appeared to be doing well at first. So much so that in 2006, Alexander Vik tried to buy up the French media group Vivendi for 36 billion euros, as Libération reported at the time. He had previously been in talks with Vincent Bolloré, according to Les Echos, with a view to taking over the Havas group.
But two years later, the crisis hit Sebastian Holdings. According to Forbes, Alexander Vik was even taken to the emergency room by his wife, where he was treated for anxiety. Little wonder: having taken out a $500 million loan from Deutsche Bank, the investment fund received several margin calls from the bank. Sebastian Holdings’ accounts were cleaned out, with the company still owing the bank $244 million.
A further issue, again according to Forbes, was that Alexander Vik, who owned 100% of the shares in Sebastian Holdings, had transferred funds from his company to offshore accounts.
“Realizing that [Sebastian Holdings] had incurred hundreds of millions of dollars in losses and faced imminent margin calls from its prime broker Deutsche Bank, Vik exercised his control over [Sebastian Holdings] to strip it of its assets,” said Deutsche Bank at the time.
In response, Alexander Vik accused the bank of “inappropriate” margin calls. This marked the start of a lengthy legal battle between the businessman whose net worth was estimated at $1 billion – by Forbes – and Deutsche Bank.
A 10-year trial
A first trial took place in the UK in 2013, in the Commercial Court, and lasted 44 days. According to the French financial industry publication L’Agefi, Sebastian Holdings accused Deutsche Bank of issuing unwarranted margin calls after the Lehman Brothers bankruptcy, and of liquidating the hedge fund’s assets, resulting in losses of up to $8 billion.
According to Landmark Chambers, Deutsche Bank won the first ’round’. The court ordered Sebastian Holdings to pay £285 million to the bank, including reimbursement of 85% of court costs, with a down payment of £32 million. In addition, according to Forbes, Alexander Vik was accused of lying, and of deceitfulness during the trial. The judge went as far as to accuse him of fabricating evidence.
Alexander Vik tried to have the decision overturned, according to City A. M. Unsuccessfully. Ten years later, the Court of Appeal upheld the first sentence, which Alexander Vik considered too harsh. “The court has found that Alexander Vik knowingly gave false evidence about Sebastian Holdings’ assets and deliberately breached the Court’s order to disclose documents about those assets in order to frustrate enforcement of the judgment debt owed to us. We will continue to pursue recovery of the amounts owed,” said Deutsche Bank, as reported by Bloomberg.
In the interim, according to Landmark Chambers, the sums owed by Alexander Vik to Deutsche Bank went unpaid.
Deutsche Bank reportedly obtained the conviction of Alexander Vik in 2014 and again in 2016 on these grounds. In 2019, the bank claimed over £53 million in damages.
The Supreme Court finally ruled in favour of Alexander Vik in June. Mr. Vik was refusing to pay more than £700,000 in interest charges, a far cry from the millions being claimed, on the basis of section 24(2) of the Limitation Act 1980. The article provides that “No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years from the date on which the interest became due.”
This was despite his previous statements, as reported by Forbes, where the businessman stated during his trial in London: “I’m here. If I have done something wrong, I can pay whatever judgment my Lord decides. I can’t avoid anything. If I did something wrong, I am responsible.”
A decision that is strongly contested by Deutsche Bank, which accuses Alexander Vik of deliberately dragging the case out, so that given the law, he does not have to pay everything he owes.
Another venture into Fintech
The legal proceedings did not stop Alexander Vik from getting involved in other projects. Always keenly interested in new technologies, the businessman invested heavily in Fluid finance, a financial application based in Switzerland, which uses crypto-currency to facilitate funds transfers.
In a 2022 interview with Forbes Monaco, published in full on Medium.com, Alexander Vik explained : “The idea is to allow money to be transferred transparently from the real world to the digital world and vice versa, via the blockchain and instantaneously, anywhere in the world. With you still in control.”
A new challenge which seemed to start out well. However on June 12, the Swiss magazine Bilan published this article: « A Geneva fintech takes hundreds of savers and investors down with it.”
This was Fluid, whose users and investors, including Alexander Vik, have reportedly had “their deposits frozen for several months, for a total amount that runs into millions.” The article goes on to say that the app’s founder, Robert Sharratt, an ex-financier from Geneva, is even facing prosecution from the Public Prosecutor’s Office, although he claims he is innocent.
In February, the application’s founder published a video in which he told his community that the company’s accounts had been frozen “by a court decision”. And while many users have voiced their distress, Alexander Vik and other investors are suffering the biggest losses, with market capitalisation of the application dropping from “60 million to 2 million in a few hours, following the collapse of its share value.”
When contacted by Bilan, Alexander Vik declined to comment on the matter. According to the Swiss newspaper, the businessman lost at least 10 million Swiss francs, over $11 million, through his investment.
A setback for sure, but Alexander Vik’s character and instinct, which some media freely describe as “flair”, have always helped the businessman to bounce back. Who knows what other opportunities the Monegasque resident may grab in the future?