Liberty Steel customers in the UK have been receiving letters chasing payment for historical invoices that were already satisfied.
The letters come from law firm Kennedys in Sydney, which is representing Australia's BCC Trade Credit in relation to "alleged underlying trading activity" that the underwriter was asked to insure by "various Greensill entities".
Supply chain financier Greensill was Liberty's main lender before it filed for administration in March 2021 after credit insurance was withdrawn. It insured receivables through BCC Trade Credit, which is now part of the Tokio Marine Group.
Tokio Marine last year said it would not pay out on insurance policies obtained by Greensill, and the matter is now the subject of proceedings in the Federal Court of Australia.
The Kennedys letters, some of which have been seen by Argus, suggest amounts are owed by the buyers to Liberty MDR Treasury (TCUK) or Speciality Steels UK (SSUK), but numerous recipients say the amounts were already satisfied. "Our client has also been informed that the amount set out in the schedule to this letter are owed … to TCUK and/or SSUK", the letters state.
The letters refer to "alleged trading" and the "sale and purchase of tangible, moveable goods" and ask buyers if they have traded with the companies at any time. Buyers surveyed by Argus said the invoices were backed by real trade.
Kennedys asks the buyers to provide details of the trading history, including contracts, invoices and evidence of payment. The letters seen by Argus refer to trade between March and November of 2021 and total tens of millions of pounds worth of material. The material involved is merchant bar, according to the buyers.
In May 2021, the UK's Serious Fraud Office (SFO) announced an investigation into "suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance, including its financing arrangements with Greensill Capital". Last April, SFO investigators visited numerous Liberty offices and seized documentation related to the investigation.
Kennedys refused to comment, while BCC Trade Credit could not be reached for comment. Liberty also declined comment. The SFO said its investigation is ongoing.
