BNP Paribas has filed lawsuits against an owner of the collapsed oil trader Gulf Petrochem, seeking repayment of around £108mn in loans and interest that were called in after the bank said it discovered the company had issued false invoices.
Gulf Petrochem and the wider GP Global group collapsed in mid-2020, owing large sums to a group of trade finance banks, including Credit Suisse, Natixis, Rabobank and UBS.
The litigation launched by the Swiss arm of BNP Paribas appears to be the first instance of a bank taking aim at members of the Goel family who owned and managed Gulf Petrochem, following a flurry of litigation between banks and ship owners over cargoes that were offloaded without lenders being repaid.
In October 2023, BNP Paribas won an AED436.2mn (£97.3mn) judgment against Gulf Petrochem, former “owner-operator” Prerit Goel and other unnamed defendants in a United Arab Emirates court, and all avenues of appeal were exhausted on December 18 last year, according to a court document filed by the bank.
The UAE court found Goel and other personal defendants had “personal and direct liability for all the obligations owed” by Gulf Petrochem, according to BNP Paribas’ filing.
The French lender is now seeking to enforce the judgment in the UK against Prerit Goel, who the bank says is believed to reside in London, in a case filed in December last year. It also claims a further £10.5mn in interest.
It is also attempting to enforce the judgment in India against Prerit’s father Ashok Kumar Goel and other defendants, according to court documents there. After creditors receive judgments in their favour, they typically move quickly to enforce them in jurisdictions where the borrowers have assets.
There has not yet been a hearing in the case and Goel is yet to file a defence, according to court records. Neither Goel or BNP Paribas responded to requests for comment.
BNP Paribas says in the London filing that it began providing credit lines to Gulf Petrochem in 2017, but alleges that from early March 2020 the trader “began issuing forged invoices”.
The bank issued letters of credit based on invoices purportedly provided by sellers of oil cargoes. The filing says customers to which Gulf Petrochem on-sold the cargoes were supposed to pay funds into dedicated bank accounts used for repaying the trader’s loans.
But the bank alleges that “the sums extended by [BNP Paribas] in respect of the invoices were never repaid because [Gulf Petrochem] notified its customers to pay those funds into different bank accounts, and the putative sellers subsequently denied have [sic] had any dealings with [Gulf Petrochem] or knowledge of the putative transactions”.
BNP Paribas says it discovered that the invoices were not genuine in mid-July 2020, and shortly after demanded immediate repayment of US$121.1mn borrowed by Gulf Petrochem. It says the figure was accepted in 2022 by a corporate restructuring advisor acting on behalf of the trader.
Gulf Petrochem’s parent company, GP Global, entered a restructuring process managed by FTI Consulting in mid-2020. BNP Paribas says in its filing that Gulf Petrochem and other group entities have begun bankruptcy proceedings in Dubai.
At a September 6 hearing in Delhi’s High Court, a lawyer for Ashok Goel and the other judgment debtors argued that documents submitted by BNP Paribas to have the UAE judgment recognised were not valid, according to a court order.
A lawyer representing BNP Paribas said he would seek instructions on the documents, but expressed “an apprehension that in the meanwhile there is a possibility that the judgment debtors may dissipate the assets owned by them which have been identified by [BNP Paribas] after much efforts”, according to the judge.
