Indian Scrap Trading Firm Accused of Fraud & scam

According to a report on the Deccan Herald Web site, Future Metals and sister firm Future Exim India Pvt. Ltd., charged the Spices Trading Corp. Ltd. (SCTL) for numerous shipments of steel scrap as if the containers held copper or nickel-bearing scrap.

A figure cited by the Deccan Herald estimates that the SCTL, an entity owned by the government of India, issued letters of credit for as many as 134 such transactions between 2005 and 2008. The total value of those transactions to the SCTL was nearly US$250 million for scrap that may have been worth less than US$5 million on the spot market.

The investigation in India will also look at the role of the companies that sold and bought the scrap through Future Metals, with the Deccan Herald report indicating that in the legal complaint filed by SCTL, “the directors of the two Bangalore companies and all the foreign companies involved in selling and buying had some common directors, leading to deeper suspicions.”

The companies listed as sellers in the report were Asia Metals & Commodities Pvt. Ltd., based in Singapore; Al-Mustaqbal, based in Dubai; and American Metal Management Inc, based in New Jersey in the United States.

Companies listed as buyers were Sino Asia Pacific (H.K) Ltd., Haoweilai Jinsu Ltd., and Haoweilai Jinsu (HK) Ltd., all based in Hong Kong.

The news report indicates that the home and offices of Future Metals chairman Sudheer Sriram have been searched and subsequently sealed off by investigating authorities