UBS is trying to claw back over US$14.1mn from the director of a commodities trading company who it claims siphoned funds to relatives, partly to avoid paying creditors when the firm collapsed.
The Swiss bank has filed a claim against Anil Kumar, director of London-based petrochemicals and metals trader Vincom Commodities Ltd, for damages in London’s High Court.
UBS signed a master credit agreement with Vincom in March 2014, but by June the following year the firm began defaulting on its obligations to UBS and Israel’s Discount Bank, according to a September 2021 court filing.
The firm was placed into liquidation in January 2018 following a petition filed by Discount Bank.
UBS claims that after it extended credit to Vincom, Kumar directed or allowed the company to give US$7.77mn worth of commodities to a Singapore company, Donald McArthy Trading Limited, controlled by his brother and his sister-in-law, for free.
The filing says that through eight transactions between 2014 and 2017, Vincom purchased unspecified commodities from AST Metals, a company controlled by another of Kumar’s brothers, using credit obtained from UBS. It then transferred the goods from Jebel Ali in the UAE to Donald McArthy in Singapore.
UBS claims that instead of taking payment from Donald McArthy, Vincom issued credit notes due to various reasons such as delayed documentation, that the cargo was “contaminated with acid” or was a “write-off”.
But the bank suggests those claims are false because in each case the credit notes were issued on the same day the goods were shipped from the UAE and still in sealed containers, not when the cargo was unloaded in Singapore and inspected.
Not organising payment for the cargoes was a failure of several of Kumar’s duties as a director, the claim alleges.
On November 24, the same day that Discount Bank filed a petition to wind up the company, Vincom paid another US$4.61mn to AST Metals, for which the liquidators of Vincom could not establish any reason, the filing says.
Five days later the company paid another US$953,580 to AST. “But for [Kumar’s] breaches of duty, the AST Metals payments would not have been made,” the filing says. UBS is also seeking interest and costs.
UBS claims it did not know AST or Donald McArthy were controlled by Kumar’s family members.
No response to the claim from Kumar has been made public and he could not be reached for comment. UBS did not respond to a request to comment.
Vincom’s last accounts filed with Companies House, for the year ending March 2017 and signed by Kumar, claim the company made a post-tax profit of US$393,021 on US$518mn in sales. The accounts say the company had US$57.8mn owing to creditors within one year, including US$28.7mn in bank trade finance.
The only related party transactions declared in the accounts were to two firms, Vogue Asia Ltd and Ransat Ceramics Ltd, in which Kumar declared an interest.
Filings by liquidators in the years since Vincom’s collapse show that the company’s other creditors, which provided trade finance facilities to the firm, included Credit Suisse, Sberbank and Zurcher Kantonalbank.
Credit Suisse elected to collect debts of some US$18.7mn outside of the liquidation process, according to the filings. Efforts by the liquidators to recover almost US$16mn in debt owed to Vincom by four companies in India and Singapore were unsuccessful.
The liquidators had to manually recreate Vincom’s book ledger because a flash drive Kumar claims he sent with the relevant information was never received.