Thursday, February 2, 2023 at 5:47 pm
Two Balli Steel executives have been convicted of using forged documents to mislead the bank into lending $150m (£122m) to a bankrupt commodities trader.
A jury at Southwark Crown Court today found Balli Steel executives Melis Erda and Louise Worsell guilty of six counts of fraud.
Worsell, managing director of Balli’s UAE operations, and Erda, group treasurer at the company’s London headquarters, faced up to 10 jail terms each in sentencing in April this year.
Balli executives used misleading information, forged shipping documents and falsified sales contracts to defraud five banks of providing approximately $150 million in loans to steel traders.
The British steel trader’s debts include a $100 million credit owed to the Development Bank of Singapore (DBS).
The convictions follow Balli Steel chief executive Nasser Alaghband’s decision to plead guilty to one count of fraudulent trading.
London-based trader Balli Steel uses short-term loans from trade finance banks to finance its deals, buying and selling steel globally.
However, the company collapsed in 2013, accumulating $500 million in debt to more than 20 banks, leading to an investigation by the SFO.
An SFO investigation revealed that the forged documents were produced in the name of Balli’s own in-house shipping company, Trans Ocean Navigation (TON).
However, Balli’s control and ownership of TON was concealed from the steel trader’s creditors, despite the fact that the shipping company operated from Balli’s Marylebone offices.
The convictions mark a rare victory for Britain’s Serious Fraud Office (SFO), after an investigation into the company was first launched nearly a decade ago.
“Today’s results demonstrate our commitment to fighting serious economic crime,” said SFO Director Lisa Osofsky, who is leaving this summer.
“This group of people intentionally defrauded multiple IFCs as they tried to keep their fraudulent operations afloat, using increasingly bold methods as their debt piled up,” Ossofsky said.