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Tokio Marine accuses Greensill Capital of fraud

On Monday, Japanese insurer Tokio Marine said the multibillion-dollar lending policies of Greensill Capital, the supply chain financing group that collapsed last year, were “fraudly obtained” cheat”.

The statement marks the first time since the Anglo-Australian financial services company’s March 2021 default that the Japanese insurer has officially accused Greensill of fraud.

It also provides confirmation that Greensill’s insurers will use allegations of misrepresentation as an important defense against payment under coverage provided to the financial group, such as reported by the Financial Times in July.

Tokio Marine said investigations into policies written at subsidiary The Bond & Credit Co, Unit in the heart of Australia of the Greensill relationship, found that “substantial issues with underwriting policies were misrepresented by Greensill to the BCC”.

It added that there was an “unsuccessful fraud” to disclose “material matters” before the policies were agreed and renewed and that the miscommunications continued after Tokio Marine acquired BCC operations in 2019.

“For fraudulent misrepresentations and fraudulent violations of a [insured party’s] The insurer said today that Tokio Marine informed its partners that these policies and related obligations were not effective in the first place.

This statement will deal a blow to Greensill investors, who see insurance claims as a way to recover their losses.

The aftermath of the Greensill scandal has highlighted the activities at BCC, the underwriting business that provided it with vital insurance that allowed investors to consider debts owed by the financial group to almost zero. there is risk.

The BCC office in Sydney was once visited by former UK prime minister David Cameron, at the time advisor for Greensil, emphasizing its importance to the company. When a BCC executive was fired in 2020 for exceeding his underwriting authority, Greensill’s main insurers withdrew and could not find support elsewhere, leading to corporate collapse.

Tokio Marine, the first one openly questioned effective March 2021, went on to say it would defend itself against any claim, including proceedings involving Greensill in Australia against the Australian Insurance Corporation. People close to the Japanese insurer say the Greensill default has created a “claims pipeline” in the coming months and years.

The IAG said on Monday that it is continuing to “work together with Tokio Marine to defend its claims and it” maintains its position that it has no net insurable risk on its commercial credit policies. trade sold through BCC”.

IAG has previously said it approved any exposure to Tokio Marine as part of the BCC sale.

Greensill administrators declined to comment.

Credit Suisse declined to comment on Tokio Marine’s statement.

In a separate disclosure on Monday, the Swiss lender said the process of launching legal action against insurers and companies that have borrowed from their Greensill-linked fund could take ” about 5 years”.

Credit Suisse also revealed it had reclaimed $43 million in wages from employees involved in the supply chain fund, 10 of whom were laid off.

The bank responded to questions from shareholders, led by Swiss fund Ethos, who are requesting a special audit of the bank’s failures on the Greensill. Investors have successfully lobbied for Credit Suisse amend a vote at its annual meeting this month, which should have exempted directors and executives from the Greensill scandal.

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