(Bloomberg) -- Staff at Stenn Technologies, a UK trade-finance firm, believed they were doing substantial business with major counterparties including Japanese corporates, Taiwanese electronics makers and some of Europe’s biggest companies.
Yet some of those same companies said they never worked with Stenn at all, leaving more questions in the wake of the London-based firm’s collapse earlier this month.
Internal documents prepared by Stenn officials and reviewed by Bloomberg show that employees thought Yokogawa Electric Corp. and Yamabun Trading Co. were significant customers of the firm’s trade financing services. Spokespeople for the Japanese companies denied any relationship.
“It’s completely false,” said a spokesperson for Osaka-based Yamabun, a closely held gasoline retailer. “I don’t even know the name of the company. It doesn’t make any sense at all. It’s completely off the mark.”
Stenn, founded nine years ago by Chief Executive Officer Greg Karpovsky and backed by Citigroup Inc., Centerbridge Partners and other large finance firms, collapsed into administration on Dec. 4 after lender HSBC Holdings Plc became suspicious of transactions with some of Stenn’s purported key customers. Officials at the bank feared that Stenn may have received funds from entities impersonating those clients instead, Bloomberg reported on Dec. 10.
Karpovsky didn’t respond to phone calls and messages requesting comment. In a statement to the Financial Times earlier this month, he denied any wrongdoing and said he was cooperating with the administration.
Stenn Chief Operations Officer Andrey Gurdzhibek, who also didn’t respond to requests for comment, previously said he was unaware of any wrongdoing. A spokesperson for Interpath Advisory, which is overseeing the insolvency, declined to comment.
The majority of Stenn’s 200-plus employees are losing their jobs, Bloomberg reported on Dec. 12.
Stenn’s main business was invoice financing, an established form of trade finance. For a fee, the firm would pay suppliers for invoices showing they were owed money by larger corporations, and then pursue those companies for the debts.
Employees at Stenn understood that much of the firm’s revenue came from a group of large corporations — often based in Asia but also in Europe — that were known internally as “legacy” counterparties.
Documents reviewed by Bloomberg show that a company Stenn said was Yamabun had paid about $28 million of invoices through the finance firm since 2020.
A company that Stenn recorded as Yokogawa Electric had paid about $10 million of invoices since 2021, according to the documents. Yet a spokesperson for the Tokyo-based engineering company said he couldn’t find evidence of any relationship.
“We conducted a thorough investigation of past and present transaction data for Stenn Technologies and its group companies at Yokogawa Electric,” the spokesperson said. “However, our findings revealed that no transactions with this company were identified.”
The documents also show sizable relationships with publicly-traded Taiwanese electronics companies Pegatron Corp. and Inventec Corp. People familiar with their operations, who asked not to be identified discussing private information, said they didn’t work with Stenn either.
Senior staff at Stenn believed that a number of other large corporations were also counterparties, including Zalando SE, a German online fashion company, OMV AG, an Austrian oil producer, and EDION Corp., a Japanese electronics retailer, people familiar with the matter said. Spokespeople for the companies denied any relationship.
“To our best knowledge, we can confirm that Zalando SE has no current or past business relationship with Stenn,” a spokesperson for the Berlin-based company said. “We are not aware of any fraudulent transactions linked to Stenn which would involve Zalando SE.”
--With assistance from Jonathan Tirone.
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