Credit Suisse Issued $140M On Suspicious Bills, Raising Questions On Risk Management Efforts

  • Credit Suisse Group AG CS provided an emergency $140 million loan to Greensill Capital in October 2020, less than five months before it collapsed.
  • Invoices issued by Sanjeev Gupta's Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times. 
  • Yet several parties named on the invoices have told the FT they did no business with Liberty. 
  • Related: Credit Suisse - A 'New Company Is Emerging,' Says BofA While Upgrading Stock.
  • The apparent failure to spot suspicious invoices casts fresh light on risk management failures at Credit Suisse and raises new questions about the practices at Greensill and Liberty.
  • The commodities company is part of Gupta's GFG Alliance, which is being probed by the UK's Serious Fraud Office and French police over suspected fraud and money laundering. 
  • Credit Suisse accepted the bills as collateral even after commodities trader Trafigura warned the bank that Liberty Commodities appeared to have raised financing through Greensill using a suspicious invoice. 
  • Price Action: CS shares closed at $3.37 on Friday.

Posted In: NewsPenny StocksGeneralBriefs