Baltic Dry Index. 2072 +26 Brent Crude 64.86
Spot Gold 1729
It’s only when the tide goes out that you learn who has been swimming naked.
Warren Buffett.
In our ever more dishonest, central bankster funded fake markets, fake invoices seem to have been used intentionally or unintentionally, by Greensill Capital, according to the Financial Times. Another Wirecard scandal surfacing?
How many more to come?
Come back Diogenes and bring your lamp! Is there anyone honest in today’s world of fake money, funded by the central banksters newly discovered Magic Money Tree forests?
What happens when inflation hits, or the Magic Money Tree forest dies?
Below, the LIR Easter scandal edition.
Greensill Capital’s administrator unable to verify Gupta invoices
Exclusive: Grant Thornton has received denials from companies listed as debtors to steel group
Greensill Capital’s administrator has been unable to verify invoices underpinning loans to Sanjeev Gupta, after companies listed on the documents denied that they had ever done business with the metals magnate.
Greensill, whose collapse last month has become a corporate and political scandal, provided financing to Gupta’s companies backed by payments to his suppliers and from his customers.
The disputed invoices raise questions over other transactions underpinning billions of pounds of loans from Greensill to Gupta.
It comes as the metals magnate’s GFG Alliance, which owns metals plants around the world and employs 35,000 people, teeters on the brink of collapse. The state of Gupta’s UK steel operations has been of particular concern, with unions warning that up to 5,000 jobs are at risk across the country.
Grant Thornton, which is looking to recoup money owed to Greensill in its role as administrator to the collapsed firm, last month approached companies that were listed as debtors to Gupta’s Liberty Commodities trading firm, which borrowed hundreds of millions of pounds backed by invoices.
Greensill had extended a receivables financing facility to Liberty Commodities that allowed it to exchange bills from customers for cash upfront. This process, also known as factoring, meant that Greensill would get repaid when the customer settled the invoice, by paying for goods it purchased from Liberty.
However, several of these companies have disputed the veracity of the invoices from the metals magnate’s commodities trading firm, according to people familiar with the matter and correspondence seen by the Financial Times.
RPS Siegen GmbH, a German scrap metals business, confirmed to the FT that it had been approached about an outstanding invoice and said that it had not traded with Liberty Commodities.
“We know them, but a trading relationship between us does not exist,” said Winfried Winterhager, manager at RPS Siegen.
Grant Thornton and Greensill Capital declined to comment. Gupta’s GFG Alliance said it was unable to comment without seeing the relevant invoices.
Credit Suisse, which invested its clients’ money in bond-like products devised by Greensill, this week pushed for insolvency filings against several of the British businessman’s companies, including Liberty Commodities.
Gupta, once hailed as the “saviour of steel” for his rescue of metals plants from Wales to Australia, on Thursday disputed that these debts were due for repayment.
The UK government last week rejected a plea by Gupta for more than £170m to help bail out his British operations. The FT has previously reported that Greensill provided financing to Gupta’s business empire based on invoices from ostensibly independent companies, but which actually had deep ties to the steel magnate.
https://www.ft.com/content/fe234f59-75b9-44f7-af8a-f05e588957b7
Another Wirecard? Invoices Backing Greensill-Issued Bonds Never Existed, Administrator Finds
Friday, Apr 02, 2021 - 06:00 AM
As the collapse of Greensill Capital threatens to ensnare former PM David Cameron in a humiliating public probe, the Financial Times on Thursday reported some disturbing new details that appear to suggest Greensill wasn't merely reckless, but potentially guilty of a Wirecard-style fraud. According to the FT, Greensil's administrator - who is responsible for winding down whatever assets remain and managing creditors' claims - "has failed to verify invoices underpinning loans to Sanjeev Gupta, after companies listed on the documents denied that they had ever done business with the metals magnate."
In other words, it would appear that some of the bonds issued by Greensill were backed by fraudulent invoices. Keep in mind, Credit Suisse went on to take these bonds and absorb them into "low risk" trade finance funds marketed to the bank's "professional" clients, which mostly includes institutions like sovereign wealth funds, governments and ultra-wealthy individuals. German cities that invested in a Greensill-owned bank based in Germany have also been hammered by the firm's collapse.
More
Greensill wage-advance app used by NHS nurses goes into administration
Administrators overseeing wind-down of Earnd UK with 30 employees made redundant
Thu 1 Apr 2021 15.48 BST
A wage-advance app owned by the collapsed-lender Greensill Capital and used by NHS nurses during the pandemic has gone into administration.
The Covent Garden-based company, Earnd UK, claimed to serve “thousands of UK employees across several NHS trusts” by allowing users to access their wages before their regular payday if they needed extra cash, similar to schemes run by rivals Wagestream and Hastee.
Like its parent company, Earnd tried to bolster its reputation by hiring Westminster heavyweights on to its advisory board, including Tony Blair’s former home secretary and Labour peer David Blunkett, and Dame Louise Casey, director general of the troubled families unit under David Cameron and former homelessness tsar for Boris Johnson.
The company, which also counted the former head of government procurement Bill Crothers among its directors, offered the service to roughly 10 NHS trusts free of charge but made money by charging private sector employers for the service.
Three of those contracts were negotiated through the central NHS’s corporate services provider, NHS SBS and
A spokesman for NHS SBS said it was trying “to ensure that staff can continue to access flexible salary payments via our NHS employee app, MySBSPay, in future”.
Lex Greensill struck a deal with the NHS trusts shortly after buying Earnd UK in late 2019, using cash from a fresh $655m (£475m) investment from SoftBank, a vast investment conglomerate run by the Japanese billionaire Masayoshi Son.
Earnd UK, formerly known as FreeUp, reported a loss of more than £615,000 in the final six months of 2019, according to its latest accounts.
Greensill also reportedly dispatched one of its own advisers, the former prime minister David Cameron, to lobby the Australian government to adopt Earnd while he was attending the World Economic Forum in Davos, Switzerland, last January.
The Mail on Sunday reported the offer was rejected because it was deemed too similar to payday lending.
More
Finally, what goes up, often comes down. The Archegos story of greed, leverage, egos, bankster self-deception, and a Fed fuelled gambling economy. Happily, Archegos wasn’t too big to fail, requiring yet another taxpayer bailout.
The whole article on what is wrong with the central bankster’s gambling economy is well worth the read, if only because in the central bankster funded stock casinos there are many more leveraged gambling outfits lurking, awaiting a similar fate.
Call it a side effect of building castles on crooked foundations in an artificial, fake, Fed-supported market.
Rehypothecated Leverage: How Archegos Built A $100 Billion Portfolio Out Of Thin Air... And Then Blew Up
Thursday, Apr 01, 2021 - 06:13 PM
One week after the biggest, and most spectacular hedge fund collapse since LTCM, we now have an (almost) clear picture of how Bill Hwang’s Archegos family office managed to single-handedly make a boring media stock the best performing company of 2021, but then when its luck suddenly ended it was margin called into extinction, leading to billions in losses for the banks that enabled what Bloomberg has dubbed its "leveraged blowout."
Thanks to detailed reports by the Financial Times and Bloomberg, we now have the missing pieces to complete the picture of the biggest hedge fund implosion of the 21st century.
As a reminder, and as we previously discussed, we already knew how Archegos was building up stakes in its various holdings: unlike most other investors, the fund never actually owned the underlying stock or even calls on the stock, but rather transacted by purchasing equity swaps known as Total Return Swaps (TRS) or Certificates For Difference (CFD). Similar to Credit Default Swaps, TRS exposed Archegos to the daily variation margin on the underlying stock, and as such while the fund would benefit economically from increases in the underlying stock price (and, inversely, would be hit by price drops forcing it to put up more cash as margin any day the stock price dropped) it would never be the actual owner of record of the underlying stock. Instead, the stock that Archegos was long would be "owned" by its prime broker, the same entity that allowed it to enter into TRS in the first place. As such Archegos also never had any disclosure requirements, allowing it to transact completely in the dark while being fully compliant with SEC disclosure requirements - since it didn't own the underlying stock, Archegos did not have to disclose it. Simple and brilliant.
This part is important because the lack of a documented trail of ownership to Archegos is what enabled the entire Ponzi bezzle... and the staggering leverage the fund applied to its portfolio. Furthermore, well aware that there was almost no way to verify just how much of a given stock he owned, Hwang proceeded to have nearly identical positions with not one, not two but at least eight prime brokers (the final number is still being determined as more and more come out of the woodwork).
Not that Archegos prime brokers were completely clueless as to what was going on.
More. Much, much, more.
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