Directors jailed for £358m fraud

Three directors of a metal trading firm which conned the banks out of
millions of pounds are facing jail sentences totalling 25 years following a
Serious Fraud
Office investigation triggered by auditors PricewaterhouseCoopers.

RBG Resources chairman, Virendra Rastogi, 40, was given a nine year sentence
and disqualified as a company director for 15 years for conspiracy to defraud.

Director, Anand Jain, 40, and chief executive, Gautam Majumdar, 56, face
eight and nine years in jail and disqualification as directors for ten and seven
years respectively on the same count.

‘They created a very impressive front that fooled banks, the metal exchanges
in both the UK and USA, and well respected accountancy firms,’ said Judge H H J
Wadsworth.

He said they were involved in ‘years of calculated dishonesty’ and had showed
no signs of ‘remorse’ during the eight- month trial at Southwark Crown Court.

When RBG collapsed, WestLB and GMAC Commercial Credit were owed just over
£128m dollars with total losses to UK banks of £215m.

Between 1996 and 2002, Rastogi, Jain and ran a web of in excess of 300 fake
customers who were supposedly based in the US, Hong Kong, Singapore, Dubai,
India, France and Italy.

While the banks thought they were financing a successful metal trading firm,
quoted in the Sunday Times rich list, they were advancing money to a company
propped up by dishonesty. The ‘customers’ were Rastogi’s henchman based in
addresses around the world who would falsify documentation and purport to banks
and auditors to be independent traders.

The scam was uncovered when an employee in Hong Kong faxed false letters from
various ‘customers’ to Rastogi for review, but mistakenly sent the fax to
PricewaterhouseCoopers, who were RBG’s auditors in the UK.

PwC resigned as the company’s auditors alerting Companies House and the
London Metal Exchange triggering a two-year investigation by the Serious Fraud
Office.