The loan given by State Bank Mauritius to Renish Petrochem FZE was in the news in Dubai. A court in Dubai has ruled that the United Arab Emirates oil trading company committed fraud when it arranged for part of a trade finance facility extended by SBM to be dissipated to related entities and failed to repay more than US$21mn owed to the lender.
Renish Petrochem FZE secured a lending facility with SBM Bank in November 2017 under which the bank advanced payments to Renish’s supplier of crude oil, Prime Energy FZE.
Lanka, a Sri Lankan offshoot of the Indian Oil Corporation which had agreed to buy the cargoes, would then pay the bank via an account belonging to Renish.
According to a December 29 judgement handed down in the Dubai International Financial Centre Courts, the first three transactions were repaid to the bank without a hitch but three further advances totalling around US$30mn, between April and June 2018, were not.
Renish’s managing director, Hitesh Mehta, who personally guaranteed the facility, stopped contact with the bank after the fourth payment became overdue in June 2018 and a business intelligence firm engaged by SBM found in July that the Renish’s offices were locked and “apparently abandoned”.
Evidence presented by the bank shows that some of the funds received by Prime from the bank for the last two transactions were dissipated “within a matter of days” to an account belonging to Renish and another company, Petro Hub Energy FZE, which was controlled by Renish’s CEO.
SBM also alleged that Prime was complicit in the fraud and it was essentially operating as a single entity with Renish. But minutes before the October 2021 trial was scheduled to begin, the bank and Prime reached a confidential settlement so the judgement made no finding.
This news is from the Global Trade Review (GTR).
