Media report: Credit Suisse Greensill loan relied on questionable collateral

The $140 million loan has since been repaid, Credit Suisse has said. © Keystone / Michael Buholzer

According to the Financial Times, Credit Suisse accepted “suspicious invoices” as collateral for a $140 million loan to the since-collapsed Greensill Capital firm in 2020.

The newspaper reportedExternal link (paywall) on Monday that invoices issued by the Liberty Commodities firm – owned by Indian magnate Sanjeev Gupta – formed part of the collateral for the emergency loan, but that several of the parties named on the invoices said they had not done business with Liberty.

Following on initial revelations about Liberty and Greensill last year, the FT reported that the firms Cargill, Mitsui Bussan Metals, Toyota Tsusho Asia Pacific and Itochu Singapore said they had no record of any transactions with Liberty Commodities.

Three other companies, contacted by the newspaper, refused to comment or were unavailable for comment, the FT wrote.

Although the $140 million loan has since been paid back, the newspaper writes that “the apparent failure to spot that suspicious invoices were pledged as collateral casts fresh light on risk management failures at Credit Suisse.”

In spring 2021 Credit Suisse was hit hard when Greensill, a supply chain finance firm with whom it was involved, collapsed. The bank has since managed to recoup some $7.4 billion of a joint $10 billion fund.

A spokeswoman for Switzerland’s second-biggest bank told the AWP news agency on Monday that “Credit Suisse Asset Management has continued to work tirelessly on the recovery of cash for investors in the supply chain finance funds”. A written statement added: “the recovery of the bridge loan made to Greensill Capital, in full, plus interest owed, is further evidence of our absolute determination to seek recourse from this matter wherever we can.”

The bank did not comment on the most recent Financial Times report.