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Opaque company structures and questionable transactions at the heart of Sanjeev Gupta’s GFG Alliance are driving public and private sector lenders away, leaving a major funding gap after Greensill’s collapse.
The alliance, a loose network of companies with ties to metals tycoon Gupta, has been eagerly seeking new sources of financing after the
GTR has spoken to numerous trade finance industry sources about whether private sector lenders are prepared to replace Greensill as a source of funding to Gupta’s metals trading empire.
“From what we’ve seen, there is zero appetite left in the market, and understandably so,” says one source, a lender involved in providing trade and supply chain finance services that has declined opportunities to do business with GFG Alliance companies in recent weeks.
UAE Trade Connect (UTC), a trade finance solution that addresses the risk of double financing and fraud across the United Arab Emirates, has moved into full commercial production.
Having been in development since 2017 through an initial collaboration between telecommunications firm Etisalat and tech company Avanza Innovations – as well as First Abu Dhabi Bank (FAB) – the platform formally went live with seven UAE-based commercial banks this week.
UTC allows banks to send invoice information into a private permissioned blockchain network through a node on the blockchain. This information is then run through Etisalat’s fraud detection system, which uses AI to check invoice data against other invoices and external sources for duplication and fraud.
A shipment of flat carbon steel to the UAE from India has become the first integrated paperless letter of credit (LC) and electronic documentary transaction for a steel export, according to HSBC, which financed the trade.
The live trade finance transaction between the UAE’s Universal Tubes and Plastic Industries, and India’s Tata Steel, involved end-to-end digitisation of the documentation on blockchain trade finance network Contour. essDocs,
a Contour partner, managed the electronic bill of lading (eBL) and other documentation through its CargoDocs service.
HSBC says that this transaction is an example of the operational viability of blockchain as an alternative to conventional exchanges of paper-based documentation.