Forex - Caveat Emptor? at FinGad.com

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Categorie: Emerging Markets
Submitted 7 months ago by

Ian

It appears banks being sued by irate clients who bought derivatives contracts and lost money on them is not limited to this country. Divania, Italy’s tenth largest exporter, is suing Unicredit, Europe’s second largest bank, for fraud and usury, for having been sold derivatives contracts that lost money, forcing the $100-million company to shut down.A similar scene is playing itself out here; several Indian companies are taking matters to the courts — Sundaram Multipaper is suing ICICI Bank, for one — about being similarly fooled; ICICI Bank says that the company knew what it was getting into.Media reports have named Yes Bank and Kotak Mahindra Bank as other banks that ‘mis-sold’ such derivatives contracts to unsuspecting companies. The Reserve Bank of India (RBI) has received complaints from other companies too that say were misled by the banks. While some have alleged misrepresentation, others say that these deals were not approved by the appropriate authority, often the board of directors. “Most companies require board approval for getting a loan,” says a former financial controller at one of the companies. “Given that, taking on such exposures would require similar approvals.” None of the companies and their officials wanted to be named since matters were either sub-judice or in negotiation.Yet others allege fraud by their own employees, or officials going beyond their remit, who used th... More...

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#1 | Narasimhan @ 7 months ago Owner at Krish Systems User Rank : 1905 Portfoilo Balance: $498,940.00 Comment Rating: 0 Flag Comment Spam | Miscategorized | Prohibited: A neat exposure.

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