The French lender entered into an agreement with Forum in November 2020, in which Forum offered to sell the bank’s receivables (unpaid payments due to the business) relating to the digesters, which Forum claims were sold to Veolia’s waste management division.
In three separate transactions from March to May 2021, Forum offered Societe Generale to buy back the receivables from it.
In each case, a verification statement was sent to the bank to demonstrate that Forum had registered the assets as collateral and that Veolia had “confirmed” the assignment of receivables to the bank.
Bill Papas, aka Basil Papadimitriou, was a participant in several documents, including a payment schedule, provided by EQWE, a company appointed as an agent on behalf of SG.
“SG seeks damages against Forum and Mr Papas for engaging in common law fraud,” the lawsuit says.
“Forum Finance and Mr Papas also made statements knowing they were false and with the intention that SG would act against them, resulting in losses for SG.”
The alleged scam is similar to what happened with Westpac.
One of the Forum’s clients, belongs to the Seven Group WesTrac, told Australian Financial Survey on Friday that “it was informed that the funds were received from a line of credit in her name with Westpac.”
“WesTrac has no knowledge of access to funds and has notified the bank accordingly,” a company spokesman said.
Neither Papas nor Forum responded to requests for comment and provided no defense in the case. The hearing is scheduled for Friday, July 9th.
The alleged fraud will no doubt come as a shock to the Sydney football community. Mr. Papas was president of Sydney Olympic FC, one of the city’s most respected clubs.
The $ 200 million after taxes will also hit Westpac’s bottom line. On Friday, Citi analysts cut their earnings forecast by 3% in what they called “unfortunate but probably rare.”
“While we expect additional information to become available over time, at first glance this may seem like a sophisticated fraud on the part of one person, and the risk in the banking sector cannot be completely eliminated,” analysts write.
Analysts at Morgan Stanley added that the loss would reduce the bank’s Tier 1 capital ratio by 5 basis points to 12.7%.
Westpac shares fell 0.27% on Monday at $ 25.58.