Trafigura warned Credit Suisse about Gupta invoices last year

According to three people familiar with the matter, the commodity trader Trafigura warned Credit Suisse last year that the bank’s supply chain finance fund appeared to contain suspicious invoices from the business empire of industrialist Sanjeev Gupta.

The collapse of US$10 billion Credit Suisse funds that packaged invoices related to failed supply chain finance experts Greenhill Capital, Angered the customers of this Swiss bank, they invested billions of dollars in them.

Credit Suisse warns $1.2 billion in debt Deals with metal giant Gupta, one of Greensail’s largest former clients, may be difficult to recover. Greensill was once one of the most highly valued financial start-ups in the UK. Former Prime Minister David Cameron served as a consultant and applied for management in March.

According to three people familiar with the matter, Trafigura issued a warning to Credit Suisse in July 2020 about the so-called accounts receivable listed in the annual accounts of a supply chain finance fund. The accounts receivable indicate that Trafigura owes Gupta’s Liberty Commodities funds, which is the main metal trading business he founded nearly 30 years ago and is part of his GFG alliance.

Before the implosion in March, Greensill would borrow money from customers including Liberty and obtain invoices from their suppliers or customers as collateral. The loans are then bundled into investments and sold to funds, mainly funds managed by Credit Suisse.

The fund account in question indicates that Liberty Commodities has raised funds from Greensill based on a $30 million invoice issued to Trafigura, one of the world’s largest commodity trading companies. This means that when Trafigura pays the invoice, the investors in the Credit Suisse fund should have been rewarded.

However, according to people familiar with the matter, Trafigura executives told Credit Suisse bankers that they did not believe the invoice was authentic.The warning comes as Credit Suisse is in crisis Internal review Of funds.

According to two people familiar with the matter, Credit Suisse executives then contacted Lex Greensill, the founder of the financial company of the same name, who explained that he believed there was a misunderstanding of what the fund documents represented.

Credit Suisse, Trafigura, Greensill Capital and Gupta’s GFG Alliance all declined to comment.

When Trafigura’s intervention came to light, Credit Suisse’s level of due diligence on these funds was under increasing scrutiny. The multiple class action lawsuits that brought together dozens of wealthy fund investors are accelerating.

According to Bloomberg’s report last week, the bank’s own commodity trade finance department shared their concerns about Gupta with compliance officials after discovering that the funds were invested in bills related to its business.

Financial Times April report The loan provided by Greensill to Liberty Commodities was based on suspicious invoices.The UK Serious Fraud Office announced last month Investigate GFG is suspected of fraud and money laundering, including its “financing arrangement” with Greensill.

GFG denies wrongdoing and promises to cooperate fully with SFO investigations.

in a April letter To the British “Financial Times”, Gupta explained that Greenhill allows his business to raise funds from “potential customers of free commodities” because Greenhill’s facilities allow “potential” or “future” accounts receivable.

However, a document issued by Credit Suisse to fund investors in April showed that Liberty Commodities does not have a so-called “future accounts receivable” tool, which means that funds can only be raised based on existing invoices.

A document from GFG in December 2019 seen by the Financial Times also pointed out that Liberty Commodities has a regular “accounts receivable” facility, which is in line with the “future receivables” provided by Greenseal for some of its industrial companies. “Accounts” convenience is in sharp contrast.

The British “Financial Times” previously reported that several European metal companies listed on Liberty Commodities invoices denied any business dealings with Gupta’s group. GFG previously denied any wrongdoing in response to a report in the Financial Times.

Compared with these companies, Trafigura has established a multifaceted relationship with Gupta in recent years, and Gupta began his career as a commodity trader before purchasing a metal factory.

In addition to buying metals from Gupta, commodity trading houses also provide Part of a $350 million loan Supported his purchase of a French aluminum smelter in 2018.