StanChart, sugar group in legal battle

StanChart, sugar group in legal battle
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First Published: Thu, Sep 24 2009. 11 37 PM IST
Updated: Thu, Sep 24 2009. 11 37 PM IST
New Delhi: India’s leading sugar trading firm and Standard Chartered Bank are locked in a legal dispute over derivatives trading losses, according to industry officials and sources.
The Indian Sugar Exim Corp. (ISEC) says it has suffered losses in currency hedging and blames Standard Chartered for bad advice. A bank executive, who did not want to be identified, said clients were always clearly advised about the risks in derivatives trade.
A spokesman for the bank’s South Asia operations declined to comment, saying the bank would not discuss the matter as it is being dealt with by a court in Mumbai.
J.B. Patel, chairman of ISEC, which is jointly owned by the Indian Sugar Mills Association (Isma) and the National Federation of Cooperative Sugar Factories Ltd, said the company had suffered losses from derivatives trading, and was seeking legal remedies.
“It came to the notice of the committee members in April that the organization had entered into derivatives trading which led to losses which must be in crores” of rupees, Patel said on Thursday.
He said ISEC was not responsible for the losses. “Standard Chartered is an authorized agent in foreign currency hedging. They did not offer us a good product for trading. We were expecting good advice from Standard Chartered, which it did not render,” he said.
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First Published: Thu, Sep 24 2009. 11 37 PM IST