Transcription
my story has been from the beginning
entrepreneurship hard work risk-taking
the relationships which you build
through the business this is a story of
super yacht spies and Scandal this is a
story about the lives of two consumate
Risk Takers colliding through their
collaboration destroying hundreds of
millions of investors money bro craft
one of the finest fund managers of his
generation lar windhorse a racy
financier with Nine Lives my estimated
exposure is beyond about 1.5
million real people people's pensions
people's Investments some of the
underlying transactions could qualify as
money laundering I made mistakes I do
work hard to rectify mistakes I made and
people who suffered because of my
mistakes and lost money too the big
question for me is where is the money
gone
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at the heart of this story you have H2O
asset management and it's founder Bruno
crft one of the biggest stars of
European investment coming under the
thrall of lar windhorst a charismatic
financier with a Criminal past my name
is lar Windor I'm the founder and the
CEO of tenor Group which is a private
Equity investment holding company why
did you agree to do the interview it's
just uh my my my own gut feeling I mean
how bad can be it's much better than uh
hiding not not showing up the impression
people might have is that I am driven by
money that I'm flamboyant the reality is
the opposite relationships motivate me
more than money my shortcoming has been
that I have sometimes cared too little
about
money my name is Robert Smith I'm the
corporate finance editor at the Ft I'm
Cynthia Maru I'm an investigative
reporter um I've been following Lara's
Windor for the past decade and and Bruno
CR and H2 I first started looking at LS
in 2017 and we realized H2O was a really
big part of the story very shortly
afterwards lwi horse is one of the most
enigmatic figures in European
Finance he's got friends in high places
Michael Douglas the Hollywood actor to
Vladimir Klitschko the heavyweight
boxing champion
since an early age I had the the the
dream to build a business Empire my
first proper business was started when I
was 14 years old in 1991 by accident uh
into the PC business got a phone call
from my main supplier a Chinese uh
businessman I met the guy I'm L
windhorse we have an appointment what
you you are 12 you are not 16 about a
month later he said look everyone thinks
it's crazy but say something about you
the Chinese friend and business partner
then moved into the guest room of my
parents home and we started he went on a
business trip with Chancellor Cole who
was one of the most powerful politicians
in Germany this is not long after the
Berlin Wall has fallen Germany has this
kind of Yearning For This economic
Renaissance and here burst onto the
scene this teenager during that trip we
got closer me and the chancellor and
became friendly he invited me into kind
of formal economic advisory Council of
the government I joined him on many
different state visits to Asia to
America he was in all the media it was a
big circus around this young kid lar is
planning to build the tallest skyscraper
in Vietnam windhorse Tower he gets
dubbed the German Bill Gates he's the
vind of German business quite soon into
his business career questions started to
emerge allegations of financial
impropriety business partners suing him
he has a string of lawsuits in his 20s
it became a need to correspond to this
amazing image the beginning of the end
or the beginning of the first big
failure because uh it was too much too
quick too fast led to me becoming a bit
careless in the 2000s lar has a string
of corporate bankruptcies he has a
personal bankruptcy he has criminal
charges I had to ask my mother
grandmother sister father uh Chinese to
give me some money because I I could not
access any cash a painful period for me
also for my parents they accused me of
um delayed bankruptcy filing for and um
breach of trust the legal advice was
this may take 10 years I decided at that
time in 2009 to do a plea bargain where
I had to pay a fine and accept a
suspended sentence and I had a criminal
record from then that got um deleted
after 10 years and he avoids going to
prison but he has to stand up in court
and he has to admit that he
misappropriated company funds I did not
procure properly signed board
resolutions to admit this is a lesser
problem for me than than to have a fraud
charge I did not have a a hidden bank
account where I I misappropriated funds
some people might have been destroyed by
all of this
not
him lar is a great corporate Survivor
but he's also a literal Survivor he
survived the plane crash the plane
needed to do a fuel stop on the way
which was almati kazakstan and it was
Winter immediately uh when it was in the
air it started to shake and then almost
flipped 90° to the right the plane broke
apart and the the back part exploded the
front part where I was in separated the
One Pilot sadly died the other one had
the more severe inuries and me the
German ambassador when I woke up was
there Kaz nurse came in and started to
with with the scissor cut my jeans I
said stop I have only one jeans with me
and don't destroy my jeans I need to go
to Hong Kong and then the the bassador
said listen cing a mirror you will not
go anywhere a week or so later he
announces that he's become one of the
biggest shareholders in Air Berlin the
deal from the hospital bed after the
criminal conviction his reputation in
Germany is really in the dirt so what
does he do he sets up in
London Mayfair is the place where
Russian oligarchs and billionaire shakes
strike deals the most fascinating and
intellectually interesting and
challenging business which is kind of
that in my view the Champions League of
business is finest that is a that is the
lubricant the fuel which keeps the whole
world economy going it basically starts
brokering Investments for people this is
a world of low interest rates quantitive
easing it's quite hard for people to
make a buck and he turns a lot of heads
his office in Mayfair is on saval roow
and the office is incredible the
penthouse floor it totally remodels the
place it becomes all black marble Modern
Art floor to cealing wine fridge a lot
of people are Bamboozled by the glitz
okay this guy has some skeletons in his
closet but as the 1000 wine is tinkling
into their glass all those concerns seem
to Mouse away it has been uh uh useful
to have um an office in London Mayfair
the last 10 years to um receive and meet
um uh clients and and investors from all
over the world it is beneficial for a
banker who lends money to a client uh to
have a relationship and to know
firsthand what's going on what is he
thinking how is he feeling does he look
good does he look confident does he look
uh scared I think all these soft factors
do matter even in the age of uh Zoom
calls and emails money begets money a
billionaire is more likely to talk to
someone who thinks is also a billionaire
so he had this amazing yacht called the
global it's like 74 M had space for 12
guests it got sold a while ago but um
when I had a yard I did use it again for
meeting people for relationships he was
bringing Bruno crust on the yard the
families of Bruno
crust Bruno crust there's a sve silver
fox he's got this winning smile and this
deep Mediterranean tan here you have a
guy who says I'm going to take a lot of
risk but I'm going to make you
rich a Bruno sets up H2O Asset
Management his own firm in 2010 he took
big risks he used a lot of Leverage he
took big bats he's someone who held his
nerve when things got really tough that
trait has brought him riches to not go
where the Crowd Goes and the ability to
hold steadfast it served him really well
in the time of the financial crisis
against all ODS they got seed investment
from nxis and they they took off his
investment philosophy is that risk
management and regulation make you cut
your positions when they go against you
he says that's when you should hold your
[Music]
nerve ordinary Savers can put their
money in H2O I'm the I'm French the
money I invested into HTO funds came
from savings and it's essentially family
money when I looked at htoo I didn't
know that company the performance that
was discussed by d2o from my advisers
was exceptional but also dered by the
names on the tickets right when you look
at like ntic you look at KPMG KES you're
like wow you feel
confident V sh is the chief investment
officer of H2O strategic positions are
doing really well he's essentially like
Bruno's business partner vanon was the
one that first established this
relationship with Lars some people even
said Bon was boted with Lars in 2015 H2O
started uh entering into transactions
with Lars Windor and related companies
right from the start it appeared to go
[Music]
wrong H2O is called H2O Asset Management
because it's supposed to invest in
liquid and transparent Financial
products what lar is selling are a
liquid Investments incredibly hard to
sell and Incredibly opaque as well
there's some very complicated
transactions so H2O is often doing
something called repo these were
repurchase agreements where Windor
companies would sell H2O a bond that
Bond would then get repurchased by Wind
Horse company it would go on and on and
on and on happening multiple times Buy
sell Buy sell Buy sell Bonds were not
just moving up down towards H2O and down
to Wind Horse companies and back they
were also moving Sideways from one uh
wind horse related company to
another so you would have the holding
company of Lars buying bonds related to
a lury company for
example from a company that was set to
back an oil venture
it's pretty strange it's a bit like the
shell game you have to follow where all
this money is and you can't back then we
did a number of transactions which
looked to us not too exotic in group
activity within companies we controlled
in retrospect you can look at it and say
was that the smartest thing to do there
was liquidity in in in our bonds and
there there was a wider audience of
investors trading those bonds the things
we did were not out of the ordinary some
of these companies they're funding it
comes out later in court they're making
loans to lar himself there's a sort of
intermingling of L's personal finances
and the corporate finances and you got
to ask who's paying for the private jet
who's paying for the super yach who's
paying for the saval row office who's
paying for the wine I do not believe
that there has been mingling between
private and and business because
everything we have done I have done I
spent my time on the last years um has
been um predominantly business the real
big Turning Point came in 2017 they
started pouring money into a lar
windhorse related
companies shy himself is worried about
this he sends an email to Bruno saying L
is leveraging himself on our balance
sheet borrowing too much money from us
and he says we have have to do something
l in his Communications to H2O he's
pretty upfront there's emails he sends
to Bruno where he says we need to clean
the balance sheets of various companies
he essentially ask H2 can you buy some
of these bonds to take them off the
balance sheet before a sort of auditor
or Bank looks at them if someone asks
you to help them clean their laundry
that's probably okay but someone asking
you to help clean their balance sheet
should set off a few alarm Bells at the
start it seems like Brun might be a bit
skeptical about Lars Take 5 minutes of
looking on the internet to see there
might be some red flags he seems to get
seduced by Lars Bruno wrote to Lars to
thank him for a week-long New Year's
trip on the yacht and said it was a
family relationship Lars winto likewise
replies says it's also for me extended
family and this is when the kind of
personal and professional lives of Lars
wi horse and Bruno crass really start to
intertwin it was like Bruno and vason
were like brothers
and then Lis turns up charismatic
Charming also very much into risk-taking
Bruno's always insisted that he thought
that there was great upside by betting
this money he could make even more for
his investors they may have
believed that there was value in this or
there's something else going on
something darker I'm Doin to I'm a
partner in Paris I've been working on
the H2 case for 5 years now some of the
underlying transactions that have been
made by tener with the funding of htoo
could qualify as money
laundering one of the Intriguing
subplots in this is the link between
Lars windhorse and a bank in Switzerland
called Falcon private bank and its
former chairman an emirati businessman
called Kad Al kubaisi Falcon Bank and Al
kubaisi were implicated in the 1mdb
Scandal and this is the Malaysian
Sovereign wealth fund billions of
dollars were siphoned off by by high
level Malaysian officials and their
Associates and then laundered all over
the world some of that money went
through Falcon Bank in 2016 Swiss and
Singaporean Regulators found that Falcon
Bank had breached moneya laundering
regulation on some of these trades KPMG
did an internal investigation into
Falcon and found that um Al kui had a
fund at the bank which carried out 100
transactions linked to Lars windhorst
KPMG was concerned that some of them
didn't make any economic sense and that
some were used to help Wind Horse
manipulate prices and benefit him we can
see from emails between LS and H2O that
Lars suggested a number of transactions
with Falcon Bank in some cases even
after serious questions were raised
about Falcon and 1 MDB one of the Early
Trades H2O did with Lars involved Falcon
H2 had to chase LS and Falcon for weeks
to settle the tray it really was a
warning sign for trading problems to
come one in 2016 was very convoluted so
LS asks H2O to do a quick and Urgent
trade and it involves bonds and cash
moving from one party to the other in a
daisy chain when vason asks why Falcon
is selling the bond LS explains that the
point of the daisy chain is to get money
to a third party all together two Banks
refused to clear the trade on compliance
grounds leaving them to look for someone
else to step in we asked H2O about these
trades but they didn't specifically
address them 12 years ago 13 years ago
um Fon Private
Bank um as a
bank and decided to
invest um into various um opportunities
we brought to them Securities stocks and
bonds not even directly from us but
through the issuing Bank who issued
those Securities there has been a
bank-to-bank transaction like it is
usually being done in the financial
market and uh what then the bank does
with the Securities they have bought on
their own book is solely a decision and
a discretion of the bank and nothing
where um we can be and have been uh
involved with
we had no um direct um business
relationship with
uhi I cannot imagine given the nature of
how transactions were executed and
booked uh that uh an a money laundering
risk could U uh um be something which
would um face us or them lar has had so
many near-death experiences in a
corporate sense and we keep hearing oh
well he got out of this scrape cuz H2O
gave him some money what evidence is
there for
[Music]
this I spent quite a bit of time pulling
together all the amounts all the
different companies that we knew were
connected to larence Windor we were
thinking you know maybe this will spit
out a few hundred million if it gets to
half a billion that'd be great that's a
nice sexy round number and we got to
over 1.4 billion we can hardly believe
it one of the most revered fund managers
in Europe has bet over a billion euros
with a guy with a Criminal conviction
behind it all days before we publish our
investigation vonson sends an email
talking about all the problems with this
exposure related to lar and he says
confidence takes a long time to build
but it can vanish quickly at this moment
he doesn't realize that confidence is
about to vanish very quickly in
H2O it's like a bomb going off the stock
price of h2o's parent company the French
Bank n tias crashes questions raised
about the liquidity of h2o's funds
investors got really spooked and started
yanking their money out around about 8
billion euros in8 days and in the middle
of this Bruno tries to sort of halt this
crisis of confidence if he talks
directly to investors he can he can stop
the Stampede and there's a couple of
video addresses he does
there was a number of investors
originally pulled money out there was
other investors who were convinced Bruno
as we understand really thought this was
going to blow over in no time the second
video was less confident we never gated
and we will never gate volatile periods
have always been a great
opportunity we will never gate the funds
he will never stop investors from being
able to withdraw their money and it's
sort of a magic spell that stops the
Stampede those message gave me zero
confidence now Texas was trying to get
out of H2O you've got like very tangible
information out there I understand
you're trying to calm everybody down
but there is bad news why hide it Bruno
is a risk taker he's ramped up all these
leverage
positions and he runs into the co
crash h2o's funds crash they crash as
much as
50% and that's really problematic
because Bruno has to stay within
regulated caps on how much a liquid
exposure they have and as the liquid
Investments crash in value the liquid
Investments become a bigger proportion
the funds he start to breach some of
these thresholds again it's this you
know holding the nerve going against the
grain that everybody else does which is
kind of the tagline of H2O h2o's
approach is and has always been always
to go where others don't Bruno promised
investors that he'd never get the funds
Regulators effectively do that for him
and a whole number of funds were frozen
essentially the investors could not take
their money out anymore what H2O does it
carves out these Wind Horse bonds it
creates a sort of wall around this toxic
exposure and it walls off 1.6 billion
EUR of investors money and says you know
we can't give you this back until we get
the money back from lass I looked at my
my bank statements every month you just
see the valuation of that that asset
diminishing and diminishing like snow
Under The Sun It's it's dark my opinion
about them is is really uh is very poor
U to say that least according to the
investors who are suing H2O they've
calculated that H2O was exposed by
between 2.3 and 2.7 billion to Lars wind
horse related companies H2 disputes that
figure this document which is minutes by
the H2 executive committee you have this
sentence at the beginning of the
document that states currently H2 funds
exposure to the tener group nine
entities amounts to
2.7 billion million
EUR you know French regulator holds an
enforcement hearing hogus handed down
the biggest fine for an asset manager
ever in French history 75 million EUR
he's had to pay a massive settlement to
avoid a fine in the UK Bruno Crest was
fined 15 million but more seriously they
ban him from fund management Bruno isn't
allowed to run funds for half a decade
this is the most serious sanction
against the manager in frats and it's
handed down to someone who's once one of
its biggest stars it's an incredible
Fall From Grace vanon Shay was fine 3
million a lesser fine because he' raised
the alarm but they continued on vanon
Shay remains as Chief investment officer
Bruno was retitled Group corporate and
strategy
director it's easy to point H2O but
that's not the entire story we're not
only suing H2O we also pursuing the
Texas investment managers KPMG and Cass
Bank the Tas is responsible for
supervising the management of its
Affiliates relating to internal control
money laundering control casis Banks
should have checked whether all the
Assets in the funds were duly invested
in liquid Securities KPMG the auditor of
the funds also have an oversight
responsib ility at the heart of this
there's ordinary Savers money you know
billions that were placed with what
seemed like a reple investment firm have
sort of gone up in smoke the safety
wolves that are built into the financial
system fail to operate properly
internally in H2O why did these safety
valves not work in the case of the FCA
H2O basically tried to cover things up
it submitted false documents to the
regulator it created board minutes for
meetings that didn't happen when they
asked them oh have you had any sort of
personal trips with Lars they didn't
really tell them anything Bruno had
flown around the world and taking these
super yacht trips when it comes to the
FCA rather than finding them more they
were settling with them to get age too
old to payb investors the decision by
the FCA states that 2
250 million EUR would be dedicated to
all investors whether they decide to Sue
or not h has decided to discriminate
against those who want to get their
money back they can either take a
relatively small amount of money these
250 million divided amongst all these
investors and it's a fraction of what
they believe that they're owed and in
return not Sue any of the other parties
that should have in the eyes of the
investors had a responsibility from
preventing this from happening or they
can wait and age indicated that they
might have to wait 6 years you need to
trust asset managers and the financial
markets as a private investor I think
this really goes against it it's will
bring like a lot of distrust to to the
to the system and time has passed so
time is not making the story better it
smells
[Music]
worse right amidst the whole Scandal LS
Windor announced he was going to buy her
to Berlin Football Club he was supposed
to have PID a down payment and he turned
to H2O to give them the liquidity and
the money to pay one person he didn't
get on with was the a president of the
club called Vernard gbow well the
problem is the president's elected by
the members so Lars can't just fire the
guy Lars turns to a team of Israeli
private spies it's founded by former
Mossad agents they run a smear campaign
against gagen Bauer a campaign that
included setting up fake fan forums they
even go to the extent of having caric
CHS Crea of gagen Bauer depicted as the
Grim Reaper the devil anyone logging on
and seeing this stuff probably think wow
the fans really have it in for this guy
when really it's a bunch of Israeli
private intelligent guys who are pulling
the strs lar doesn't pay the spies and
the spies end up suing Lars and lar has
to sell the club in disgrace for a
fraction of the money he invested LS
later claimed that he he asked the
Israeli spies to look into gigon Bower
but he didn't commission the smear
campaign I had a legitimate reason to um
ask professionals to help me investigate
what happened with the money I had
invested I now know what they did I
regret this has happened this is not
right and not
appropriate L has had lawsuit after
lawsuit different creditors chasing him
through the high court he had to testify
under Ro in
2023 but he already seems to be on to
the next chapter you know in the summer
he hosted this big party and he
introduced Nathaniel rosch child who a
Scion of one of the biggest banking
dynasties in Europe roard said oh I'm
going to be L's new executive chairman
I'm going to invest some money with L
test to him and to his incredible Drive
I've never seen anyone who works as hard
as LS it's quite remarkable if I were
speaking with Bruno right now I would
tell him why on Earth did you invest
that amount of money in someone that you
knew had this history of failures
history of bankruptcies my estimated
exposure is beyond 1.5 million euros I
really think like you've been played
you're just trying to to fight back can
say why and now it's like 5 years we are
told it's going to be 11 years do I feel
great I feel terrible lar seems to get
you know two billion EUR from H2O in one
form or another to fund those Ventures
but where does it all go one school of
thought is that he did invest it but
that the Investments went bad did the
money go into the companies but not in a
liquid and and fast enough fashion
therefore killing the companies or did
they go wandering off somewhere else was
it being poured into these businesses or
was it helping fund his lifestyle the
yacht I bought before I met H2O I cannot
be always right I might spend money
where it wasn't Justified we do spend
money and do things which are Justified
because those activities and those
expenditure have created over the last
few years New Opportunities which
enabled us
to repay certain amount every year the
last few
years I think there's a wild west
underbelly in finance we've got L
windhorse as one of the central figures
he's not been chastised by any
Regulators in this story if he's not
regulated he can suggest a a trade and
then it's down to the regulated company
to decide do they want to play the game
or not it is my strong desire to rectify
any mistakes to rectify losses created
because of these mistakes I feel sorry
the only thing I can do is on the one
hand to repay and keep repaying H2O
which again since 2019 every single year
we have done there will be opportunities
in the future to repay people or to
rectify losses the game isn't over we we
are maximum at at half time
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