On February 2 at Southwark Crown Court, the Serious Fraud Office (SFO) secured convictions of two executives of British steel trading business, Balli Steel, on six counts of fraud.
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Nasser Alaghband, CEO of Balli Steel, had pleaded guilty to one count of fraudulent trading, ahead of the 20-week trial.
Balli Steel Plc bought and sold steel around the world using short-term loans from trade finance banks to fund its deals. The company collapsed in 2013, having amassed debts of around $500 million to over 20 creditor banks, triggering an investigation by the SFO.
SFO investigators exposed how two of the defendants, executives Melis Erda and Louise Worsell, conspired to deceive trade finance banks by providing misleading information, false shipping documents and forged signatures on fake sales contracts.
This allowed Balli to obtain a string of loans to bolster the company’s finances and continue trading, while avoiding the repayment of many of these loans.
By February 2013, this had led to a cumulative loss of approximately $150 million for five banks, including a debt of over $100 million owed to the Development Bank of Singapore (DBS).
The SFO also uncovered that many of the falsified documents were produced under the name of an in house shipping company, Trans Ocean Navigation (TON).
It was concealed from Balli’s creditors that TON was not an independent shipper but controlled by Balli, was registered at an accommodation address in the Cayman Islands and was operated from Balli’s own London offices in Marylebone.
The investigation involved a record-breaking degree of international co-operation. 30 requests for evidence, more than any previous SFO investigation, were sent to law enforcement partners in 25 different countries, including Belgium and The Netherlands. ■
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