HSBC Bank accuses Seaboard Corp. of committing fraud by knowingly undermining a soybean contract in Uruguay that backed a loan worth $13.2 million, reports the Kansas City Business Journal.
Seaboard denies all the accusations.
The case revolves around a Uruguayan company called Cereoil, which Seaboard bought a 45% interest in from a woman named Lucia Viana. The ownership stake made Seaboard a strategic partner, with the goal of expanding Cereoil's activities throughout South America. The deal included Seaboard appointing the company’s CFO, Alejandro Guzman.
According to the lawsuit, in April 2016 Guzman proposed creating a $10 million line of credit for Cereoil with HSBC Bank. The loan would be guaranteed by exporting agreements between Cereoil and Seaboard on 40,000 tons of soybeans that would ship in October 2016.
HSBC claims that Guzman assured the bank that Cereoil would fulfill the contract that backed its loan, despite being fully aware the soybean shortage and the new contracts with Seaboard would make that impossible. Soon after that conversation, Cereoil began shipping all of its remaining soybeans to Seaboard under the new contracts, rather than the one that backed the HSBC loan.