Japanese underwriter Tokyo Marin has accused Grinsil Capital of using “fraudulently obtained” insurance policies, while firing the latest bill in the fight over who pays for the collapse of the UK-based finance company.
Greensil collapsed last year after canceling its insurance coverage. The company, led by Australian financier Lex Grinsil and backed by Softbank, used the insurance to ensure its borrowers would repay their debts. This allowed Greensil to sell the debt, mostly to Credit Suisse, where it is marketed to end investors with almost no risk.
Greensil’s breakup has launched a global fight to recoup billions in losses. Credit Suisse warned on Monday that legal action against insurance companies and loan companies from the fund linked to Greensil could last “about five years.”
Tokyo Marin’s statement on Monday marked the first time since Grinsil’s insolvency in March 2021 that the Japanese insurance company has officially accused its customer of fraud.
She also provided confirmation that Grinsil’s insurers would use allegations of misrepresentation as a Critical protection Against payment for coverage given to the finance group.
Greensill’s policy was signed by a Australian subsidiary Of Tokyo Marine as The Bond & Credit Co. The Japanese parent group said it had found that “material matters for the underwriting policies were fraudulently presented to BCC by Greensill”.
She added that there was a “fraud failure” to disclose “material matters” before the policies were agreed and extended and that the false representations continued after Tokio Marine acquired BCC operations in 2019 from the Insurance Australia Group.
“In light of those misrepresentations and fraudulent violations of a [insured party’s] The duty of disclosure, Tokio Marine announced today to the opposing parties that these policies and the accompanying obligations are void from the outset, “the insurer said.
The statement will come as a blow to Greensil investors, who see insurance claims as a way to do so To recoup their losses.
The fallout from the Greensil scandal highlighted work practices at BCC, the underwriting business that provided it with the crucial insurance coverage, that allowed investors to treat debts originating from the finance group as almost risk-free.
The BCC’s office in Sydney was once visited by former British Prime Minister David Cameron, then Grinsil’s consultant, Emphasizing its importance to society. When a BCC executive was fired in 2020 for exceeding his underwriting authority, Grinsil’s major insurers withdrew and were unable to find coverage elsewhere, resulting in the group’s demise.
Tokio Marine, which is first Publicly questioned The validity of the insurance in March 2021, went on to say that it would defend against any claim, including proceedings related to Grinsil in Australia against IAG. Insiders at the Japanese insurer said Grinsil’s insolvency process has created a “pipeline of claims” expected in the coming months and years.
IAG said on Monday that it continues to “work together” with Tokyo Marin to defend the claims and it “maintains its position that it has no net insurance exposure to commercial credit policies sold through BCC”. IAG has previously said it transferred all exposure to Tokyo Marine as part of the BCC sale.
Grinsil’s manager declined to comment.
Credit Suisse declined to comment for the Tokyo Marin statement. In her revelations on Monday, she revealed that she collected $ 43 million in wages from employees involved in supply chain funds, 10 of whom were fired.
The bank responded to questions from shareholders, led by the Swiss fund Athos, who demanded a special audit of the bank’s failures in Greensil. Investors successfully ran the Credit Suisse campaign Fix vote At its annual meeting this month it was sacking directors and executives over the Greensil scandal.
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