Ex-Balli Steel CEO jailed in London for trade financing fraud

Sam Tobin
Updated ·2 min read

By Sam Tobin

LONDON (Reuters) -The former CEO of a collapsed British steel trader was sentenced to six and a half years in jail by a London court on Tuesday for his part in a "widespread and systematic" trade financing fraud.

Nasser Alaghband, who was the chief executive of London-based commodities trader Balli Steel, had pleaded guilty to one count of fraudulent trading before the trial.

Prosecutors said Alaghband, 62, helped obtain trade financing for Balli Steel, which involved telling "increasingly egregious lies" to banks as the company's financial position deteriorated in 2012 and 2013.

Prosecutor Jane Bewsey said on Monday that five lenders lost a total of approximately $150 million as a result of the fraud.

Balli Steel collapsed in early 2013 with a shortfall of 315 million pounds ($394 million) between what it owed to creditors and assets which could be realised, prosecutors said on Monday.

Sentencing Alaghband at London's Southwark Crown Court on Tuesday, Judge Michael Hopmeier said he had played a leading role in the "substantial, sophisticated and lengthy fraud".

Melis Erda, the former treasurer of Balli Steel's parent Balli Group who was described by prosecutors as Alaghband's effective "second-in-command" for obtaining trade financing, was found guilty of six counts of fraud in February after a five-month trial. She had denied the charges.

Louise Worsell, managing director of Balli Steel's Middle East subsidiary who prosecutors said was "actively involved in the dishonesty" to obtain trade financing, was also convicted in February of four counts of conspiracy to defraud. She had denied the charges.

Erda, 56, was sentenced on Tuesday to 46 months in jail. Worsell, 68, was sentenced to 38 months in jail.

Judge Hopmeier told the defendants during the sentencing that defrauding banks causes "real damage – not merely to the bank, but to ordinary men and women who hold their savings in the bank".

(Reporting by Sam Tobin; Editing by Frank Jack Daniel)