A group of banks led by ING Groep won a court order compelling Citigroup Inc. and Sumitomo Mitsui Financial Group Inc. to reveal account details linked to failed commodities firm
Agritrade International Pte.
The Singapore ruling makes the two lenders share client names, bank statements and fund transfer instructions, according to court documents obtained by Bloomberg News. The information obtained from the banks may only be used for legal proceedings, according to the August 17 order.
Stung by $1 billion in exposure to the collapsed commodities trader, the 15 banks in the group argue that the account access will help them trace, locate and recover funds from what they claim was fraud on the part of Agritrade. Other banks in the group include Malayan Banking Bhd., Malaysia’s biggest bank, Japan’s Mitsubishi UFJ Financial Group Inc., and Natixis SA of France.
Agritrade is among a clutch of failures in Singapore’s commodities sector this year. Lenders are struggling to reclaim loans, alleging they were tricked by forged documents and by traders pledging cargoes to multiple banks. The biggest fallout is Hin Leong Trading Pte that spectacularly collapsed in April, owing banks about $3.5 billion.
ING earlier this year alleged that Agritrade CEO Ng Xinwei and his father Ng Say Peck misrepresented company’s financial position to various bank lenders. The younger Ng’s lawyer had responded at the time that an independent financial adviser found nothing that linked him to fraud.
Agritrade International started off as a family-run palm oil trading firm in 1979. Its Hong Kong-listed Agritrade Resources Ltd., which operates mines in Indonesia and China, has been suspended from trading.
Meanwhile, Agritrade’s judicial manager, Ernst & Young, this month filed an application to wind down the firm, according to a Business Times report on Tuesday.