Japanese banking giant drawn into Westpac fraud quagmire

One of Japan's largest banks is added to the growing list of victims in Forum Finance's alleged fraud

Japanese banking giant drawn into Westpac fraud quagmire

One of Japan’s largest banks has been revealed to be a major creditor to Forum Finance, the company accused of defrauding Westpac and other lenders out of as much as $390 million.

Sumimoto has announced that it was a potential victim of the alleged fraud, according to a report by The Sydney Morning Herald. The Japanese bank’s leasing subsidiary has launched legal action in Australia to wind up a forum subsidiary over a $98.9 million exposure.

Sumimoto is seeking the return of the money it loaned Forum and damages for what it described in court documents as a “conspiracy” and “deceit” by Forum Finance subsidiary Forum Enviro.

The Japanese bank’s claims against the company comes less than a week after the Federal Court ordered liquidators to be appointed to Forum Finance, according to the Herald. A separate group is supervising the liquidation of several Forum Finance subsidiaries.

The alleged fraud was revealed last month when Westpac sought court action to freeze the assets of Forum Finance and its chief, football promoter Bill Papas. Westpac told the court it believed Forum had bilked it out of $285 million.

Forum Finance allegedly used phony invoices and forged signatures to obtain Westpac loans without the consent of at least seven of the bank’s major corporate customers, the Herald reported. Once the loan was obtained, Forum would service the loan so that neither Westpac nor the client became aware of the fraud.

Read more: Federal Court drags NAB into Westpac stoush

“It is not an overstatement to remark that it appears that Forum Finance has, by some means or another, been involved in a long-running, calculated and elaborate fraud which would rank high in the catalogue of corporate malfeasance,” Federal Court Justice Michael Lee said last week.

Papas’ current whereabouts are unknown, although it is thought he may be in Greece or the United Arab Emirates, the Herald reported. His lawyer, Rocco Panetta, told the court last week that Papas said he would return to Australia via Japan Airways on Saturday. However, no Japan Airways flight landed in the country on that day.

Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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