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Natixis succeeds against Marex in metals fraud case

Natixis succeeds against Marex in metals fraud case
FILE PHOTO: The logo of Natixis is displayed at the company's office in Hong Kong, China December 1, 2015. REUTERS/Bobby Yip -
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Bobby Yip(Reuters)
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LONDON (Reuters) – A high court judge ruled on Wednesday that commodities broker Marex Spectron must pay French bank Natixis <CNAT.PA> $32 million (£26.12 million)following a complex fraud lawsuit concerning nickel stored at warehouses in Asia.

The court also ruled that Marex could recover part of the $32 million that it had in turn sought from Glencore <GLEN.L> unit Access World, which stored the metal.

Marex, Natixis and Glencore officials were not immediately available for comment.

Natixis sued Marex in 2017 over fraudulent receipts. Marex had rejected the lawsuit and a trial was held in January this year at London’s High Court.

Marex in turn issued a claim against Access World and also filed a claim for indemnity to its insurers. Both Glencore’s and Marex’s insurers denied responsibility.

The receipts were part of a repurchase agreement, arranged by Marex, between Natixis and a Hong Kong firm. None of the parties in the case have disputed that the receipts were fraudulent but it is unclear who faked them.

In January 2019, Access World said it had become aware of fake warehouse receipts circulating in its name and urged holders to seek authentication.

In April, Marex reported a record pre-tax profit of $45.2 million for 2018 and also took a provision of $31.9 million linked to the court action.

The practice of using metal as collateral in warehouse repo deals has come under increasing scrutiny since a $3 billion fraud four years ago at Qingdao port in China, which led to a $440 million fine for the firm involved, Dezheng Resources, and a 23-year jail sentence for its chairman.

(Reporting by Eric Onstad; editing by Louise Heavens and Emelia Sithole-Matarise)

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