Balli Steel execs found guilty of £120m fraud at collapsed trading firm
Two Balli Steel executives have been convicted of using forged documents to mislead banks into lending the bankrupt commodities trader $150m (£122m).
A jury at Southwark Crown Court today found Balli Steel executives Melis Erda and Louise Worsell guilty on six counts of fraud.
Worsell, the managing director of Balli’s UAE business, and Erda, group treasurer at the firm’s London headquarters, now face up to ten in prison for each count at sentencing in April this year.
The Balli execs used misleading information, forged shipping documents, and fake sales contracts to deceive five banks into loaning the steel trader approximately $150m.
The British steel trader’s debts included $100m worth of credit owed to the Development Bank of Singapore (DBS).
The convictions follow Balli Steel chief executive Nasser Alaghband’s decision to plea guilty to one count of fraudulent trading.
The London-headquartered trader Balli Steel bought and sold steel around the world using short-term loans from trade finance banks to fund its deals.
The firm, however, collapsed in 2013, having accrued $500m in debts owed to more than 20 banks, leading to the launch of an investigation by the SFO.
The SFO’s investigation revealed falsified documents had been produced under the name of Balli’s own in-house shipping company, Trans Ocean Navigation (TON).
Balli’s control and ownership over TON was, however, concealed from the steel trader’s creditors, despite the fact the shipping firm was operated from Balli’s Marylebone offices.
The convictions mark a rare win for the UK’s Serious Fraud Office (SFO) after it first launched its investigation into the firm almost a decade ago.
SFO director Lisa Osofsky, who is set to exit her job this summer, said: “Today’s result demonstrates our commitment to battling serious economic crime.”
“This group of individuals intentionally defrauded multiple international finance houses as they attempted to keep their fraudulent business afloat, using increasingly audacious methods as the scale of their debt spiralled,” Osofsky said.