US settlement costs Nyrstar owner Trafigura €51 million

A new day, a new scandal for Trafigura.

In this article, Bert Broens of De Tijd states “Singaporean commodities trader Trafigura is paying $55 million (€51 million) in a settlement with U.S. regulator CFTC for alleged fraud and manipulation.” For example, Trafigura allegedly used non-public information for its gasoline trading in the period between 2014 and 2019, in addition to manipulating a fuel benchmark to improve its positions.

In the Nyrstar case, where a number of minority shareholders are also suing Trafigura for alleged fraud and manipulation, Nyrstar recently had to reluctantly admit, after six years of steely denial, that the Belgian regulator FSMA is individually suing not only the company, but also all directors who participated in the company's allegedly fraudulent restructuring in 2019, for market manipulation and deception. It only remains to wait for a ruling from the Sanctions Commission for the final ratification to finally bring the puppets to the dance in this unfortunate saga in which all too many parties from the Belgian establishment have been making good money for years - lawyers, supervisory directors, advisors and consultants in the lead. Recently, Nyrstar NV has now also engaged a leading corporate communications agency to streamline its hitherto very misleading communications to the market. We are curious to see whether this will lead to a perpetuation of the deception, or a more open and transparent communication where past mistakes are no longer covered up.

Piquant detail: five years ago, our syndicate had to reject a proposal from the same agency because of its cost. We now have to conclude that Nyrstar NV apparently does have the necessary resources. This comes across as very sour, because it is common knowledge that the Board of Directors has been using the few remaining resources of the residual company against the interests of the company and its (minority) shareholders for years, and under application of the Limited Recourse Loan facility is obliged to dance to the tune of reference shareholder Trafigura.

In other words, the abuse of corporate assets seems to be perpetuating itself, once again at the hood of minority shareholders.

I hereby issue a warm call to the FSMA to act quickly to ensure that the Sanctions Committee issues a ruling, so that service providers of all kinds can no longer hide behind the argument of supposed innocence. And an equally warm call to the service providers sector (corporate lawyers, consultants, investment bankers and media) to apply the current Corporate Governance and KYC legislation not only to the letter but also to the spirit.

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