Serious Fraud Office gains convictions in steel fraud case

[ ON 2 FEBRUARY two executives of a British steel trading business, Balli Steel Plc, were convicted on six counts of fraud at Southwark Crown Court. The convictions were secured following investigations by the Serious Fraud Office (SFO).

SFO investigators exposed how two of the defendants, executives Melis Erda and Louise Worsell, conspired to deceive trade finance banks by providing misleading information, false shipping documents and forged signatures on fake sales contracts. A third defendant, Nasser Alaghband, CEO of Balli Steel, had pleaded guilty to one count of fraudulent trading, ahead of the 20-week trial.

Balli Steel Plc bought and sold steel around the world using short-term loans from trade finance banks to fund its deals. The company collapsed in 2013, having amassed debts of around $500m to over 20 creditor banks, triggering an investigation by the SFO. Over $100m was owed to the Development Bank of Singapore.

The SFO also uncovered that many of the falsified documents were produced under the name of an in-house shipping company, Trans Ocean Navigation (TON). It was concealed from Balli’s creditors that TON was not an independent shipper but controlled by Balli, was registered at an accommodation address in the Cayman Islands and was operated from Balli’s own London offices in Marylebone.

The investigation involved a record-breaking degree of international co-operation. Law enforcement partners in 36 countries, including Belgium and The Netherlands, provided evidence and information: more than any previous SFO investigation.

Lisa Osofsky, director of the Serious Fraud Office, said: “Today’s result demonstrates our commitment to battling serious economic crime. I am proud of the whole SFO team for successfully exposing such a complex case of international fraud, and for bringing the company’s top executives to justice.

“This group of individuals intentionally defrauded multiple international finance houses as they attempted to keep their fraudulent business afloat, using increasingly audacious methods as the scale of their debt spiralled.”

Sentencing will take place on 3-4 April. q