Indonesian lender Bank Woori Saudara has failed in a bid to recoup US$39mn it lost to what it alleged was a coal trading fraud scheme based on forged or illicitly transferred letters of credit (LCs).
The lender, which is owned by South Korea’s Woori Bank, filed a lawsuit in a Dubai court last year against commodity trader Wonder Star Trading, as well as its chief executive and majority owner Bilal Merchant, claiming it had been the victim of a fraud operation that left it facing losses of US$75mn.
It said that coal exporter Bara Daya Energi – which was not a party to the case and did not comment when contacted – presented Bank Woori with at least 18 LCs between 2023 and 2025, resulting in it paying the company nearly US$45mn, court documents show.
Bank Woori alleged that it later discovered from the purported issuing banks and the International Maritime Bureau that those LCs were fictitious and did not relate to any real shipment of goods or valid bills of lading.
The bank also claimed that 10 of those LCs were reused by Bara Daya Energi, which allegedly transferred them to Dubai-based Wonder Star to be presented for further financing. Bank Woori said this resulted in it paying an additional US$21mn in connection with the same allegedly fictitious trades.
However, the Dubai Court of First Instance dismissed the bank’s lawsuit in May this year, according to a translated version of the ruling, seen by GTR.
The court found the bank’s allegations were unsupported by evidence, and that documents did not show any indebtedness on the part of Wonder Star.
It also noted the only entity the bank had a direct commercial relationship with was Bara Daya Energi, and not the actual defendant.
As part of the proceedings, Bank Woori had requested an expert report that would assess whether funds had been unlawfully transferred to Wonder Star, but the report concluded the losses did not represent a debt on the part of the trader, the ruling said.
Bank Woori objected to the report’s conclusions and requested a further investigation from a three-person expert committee.
It argued the report failed to consider how shipping documents used by Bara Daya Energi to obtain finance from Bank Woori later ended up in Wonder Star’s possession and were reused.
However, the court rejected this request and said the expert report’s conclusions were based on sound accounting practices.
Bank Woori and its legal counsel in the US and Dubai did not comment when contacted. In response to a request for comment from GTR, Wonder Star highlighted the Dubai judgment and said the expert report concluded that “no fraudulent activity was found” by the company or Merchant.
Bara Daya Energi did not respond when contacted.
Meanwhile, Bank Woori is pursuing US court proceedings related to the same losses.
To support its claim in Dubai, the bank filed a discovery request in New York in November last year, applying for access to records from 18 financial institutions it said may hold records of fund transfers supporting its allegations.
The US filings show that in addition to the claim against Wonder Star, the bank also intends to file a claim against several other firms, including another Dubai commodity trader owned by Merchant.
This claim would relate to another element of the alleged fraud scheme, which Bank Woori says relates to payments totalling around US$8.5mn made against bills of exchange and commercial invoices.
The New York court recommended in February that discovery could be pursued against seven of the lenders, but not the other 11.
Bank Woori disputed that recommendation in March, and in July urged the court to speed up its review of the request in order to “locate the misappropriated funds while it is still possible”.
It also argued the Dubai judgment does not stop it pursuing claims against the remaining prospective defendants.
The US filings also reveal that in November last year, Bank Woori secured a 17-day worldwide freezing order against Merchant from a London court, up to a value of US$39.2mn. The bank’s counsel and Wonder Star did not comment on whether the freezing order was extended.
