Stenn, the UK-based invoice financing provider that was placed in administration last week, had its banking facilities frozen by Citi, GTR understands. 

Two Stenn companies, Stenn Assets UK and Stenn International, went into administration on December 4 after a London court granted an application by HSBC Innovation Bank. Staff at Interpath were appointed as administrators. 

Bloomberg reported this week that HSBC submitted its application after becoming concerned about potentially fraudulent transactions at the company. 

Sources familiar with the matter tell GTR that Citi, which provides banking services to Stenn, also took the decision to freeze the company’s bank accounts – an action typically taken when a lender suspects there might be a compliance issue associated with a client. 

GTR does not know whether Citi froze Stenn’s before or after HSBC became concerned over its activities. Citi and HSBC Innovation Bank declined to comment when contacted. 

An FAQ document published by Interpath on December 4 said buyers and obligors that had been using Stenn should continue to repay invoices due.  

However, it noted that payments made from November 29 were yet to be reflected on the company’s platform, Stenn Hub, which remains accessible on a “read-only” basis. 

“We anticipate that this should be resolved in the coming days but please bear with us whilst [Stenn Assets UK] and [Stenn International] work on reconciling the backlog of collections received,” it said at the time. 

A spokesperson for Interpath has since told GTR that Citi’s collection accounts for Stenn “are open for receipts and we encourage all debtors to pay in their usual manner”. 

GTR understands from former employees the company’s administration was highly unexpected. Stenn employed over 200 people globally and had deployed more than US$10bn in capital since 2016, administrators say. 

The Interpath FAQ urged suppliers using Stenn’s platform “to make alternative arrangements for any invoice discounting facilities you require or seek alternative sources of funding with alternative lenders”. 

Several industry participants have reported a spike in demand for invoice financing solutions in the immediate aftermath of Stenn’s demise. 

Additional reporting by Felix Thompson.