Commodities Broker Files $284M Suit Alleging Metals Fraud – in Echo of Natixis/Marex Case

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Dealer ed&f guy has filed a $284 million lawsuit in opposition to hong kong agencies, alleging that they knowingly supplied fraudulent warehouse receipts for nickel saved in asia, courtroom files display.

The two hong kong corporations, come harvest holdings ltd (chh) and mega wealth international trading ltd, have denied the prices.
Information of the filing comes in the first week of a tribulation at london’s high court that also pertains to fraudulent warehouse receipts for nickel. In this situation, french financial institution natixis is suing commodities dealer marex spectron for $32 million.

Other details within the cases also are similar. Chh is a defendant in each the natixis/marex in shape and the ed&f guy case.

Ed&f man declined to touch upon the case.

In tuesday’s hearing of the natixis/marex trial, judge simon bryan stated he had received an electronic mail from legal professionals appearing for chh and mega wealth expressing difficulty that lawsuits in the natixis/marex case might have an effect on their customers in the ed&f guy case due to the fact that a great deal of the background turned into the equal.

A attorney for chh and mega wealth stated on tuesday that they had no on the spot remark.

Chh is cited in the natixis/marex case, however is not a celebration to the movement.

Not one of the events in the natixis/marex case have disputed that the warehouse receipts for nickel were fraudulent but no accusation has been made as to who faked them.

The warehouse receipts have been a part of a repurchase (repo) agreement, brokered with the aid of ed&f man between australia and new zealand banking organization (anz) and the 2 hong kong corporations.

Anz isn’t a celebration to ed&f guy’s lawsuit in united kingdom courts, however in june 2017, it filed papers asking the u.S. District court docket in san francisco to permit it to interview u.S. Witnesses about the alleged warehouse receipt fraud. Anz declined to remark.

Forgeries
Ed&f man paid $117.3 million to chh and $167.2 million to mega wealth for nickel saved in asian warehouses, however the warehouse receipts the two firms supplied were forgeries, lawyers for ed&f guy said in court files.

The ed&f man files alleged the 2 hong kong firms knew or had enough motive to suspect the receipts had been forged.

The two hong kong businesses said that they had no know-how that the receipts had been fake, a protection submitting confirmed.

For the duration of the natixis/marex trial on tuesday, the insurer for marex alleged that chh proprietor wong wei kwok was underneath strain to repay a $50 million loan when he secured the marex-brokered deal for financing in go back for the warehouse receipts for nickel.

Marex has filed a declare for indemnity with its insurer for capacity losses from the fraud. The insurer, lloyd’s syndicate mcap, has rejected this claim.

Mcap lawyer luke parsons told the court on tuesday that marex had not collected sufficient historical past information approximately chh and its proprietor earlier than finalizing the deal regarding the warehouse receipts.

The lawyer for chh and mega wealth, who also represents wong, said all 3 clients had no instantaneous comment about the allegations within the natixis/marex trial.

The practice of the use of steel as collateral in warehouse repo deals has come beneath growing scrutiny seeing that a $3 billion fraud four years ago at qingdao port in china, which caused a $440 million satisfactory for the company worried, dezheng assets, and a 23-12 months prison sentence for its chairman.

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