Mauritian regulators inspect lender

The Bank of Mauritius is currently examining Silver Bank, a small lender with MRs11.4bn ($248mn) in assets, which has connections to the alleged perpetrator of the $577m nickel scam unveiled this month by Trafigura. The lender is partially owned by TMT Metals, one of the companies accused by Trafigura of a “systematic fraud” involving fake nickel cargoes. In addition, both a director at Silver Bank and a director at its sole shareholder previously worked for Prateek Gupta, the Dubai-based metals trader at the centre of the alleged fraud.

The Bank of Mauritius has confirmed that “the counterparty” involved in the alleged fraud against Trafigura is “linked to one of the ultimate beneficial owners of Silver Bank.” Therefore, the regulator has stated it will take any necessary regulatory action it may deem appropriate after it has closely examined and scrutinised all affairs of Silver Bank in the wake of Trafigura’s $625mn freezing order against Gupta’s business empire.

Silver Bank, which was previously known as BanyanTree Bank, has denied that Prateek Gupta is one of its shareholders, and stated that it “has no direct or indirect exposure to Mr Gupta or linked companies and individuals.” However, the Bank of Mauritius has confirmed that the lender’s controlling shareholder has links to Gupta, and therefore the regulator is examining all of the bank’s affairs.

Silver Bank was acquired by Cayman Islands investment firm Silver Star SPC in October 2021, which renamed the lender Silver Bank and injected $40m of capital to strengthen its balance sheet. While Silver Bank has not disclosed the identities of the ultimate owners of Silver Star, one of the company’s two directors is Smrity Sudan, who was an in-house lawyer for Prateek Gupta’s UD Trading Group.

It should be noted that Deloitte has provided Silver Bank with qualified audits for the past three years due to being “unable to obtain sufficient appropriate audit evidence” around “professional fees from related parties”.