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SoftBank Extracts $700M From Credit Suisse Trade Finance Funds

July 22, 2020 at 08:30AM

Japan’s SoftBank has removed around $700 million from investments at Credit Suisse after the Swiss bank began an inquiry over whether the funds were going to firms with ties to the company, according to the Wall Street Journal Monday (July 20), citing people with knowledge of the issue.

The funds include a Credit Suisse Group AG fund and three linked funds that provide short-term funding to small- to medium-sized businesses (SMBs).

At issue is the funds have assets that come from Greensill Capital and Softbank owns a significant stake in that U.K. firm — basically, SoftBank was both lender and borrower, the newspaper reported.

Greensill provides supply chain financing, which lets suppliers receive invoice payments early at a cost since payment delays can lead to cash flow challenges and possibly hurt a business’ bottom line. As the buyer makes a payment on the invoice, Greensill will receive the amount.

A Greensill spokesman told the WSJ the company welcomed Credit Suisse’s actions. SoftBank didn’t have an immediate comment.

In June, news surfaced that Credit Suisse Group had begun to review funds invested in loans set by Lex Greensill and supported by the SoftBank Vision Fund. At the time, it was noted that the financial institution (FI) was reviewing its supply chain finance funds that have short-duration corporate debt and help many Vision Fund-backed startups.

A Credit Suisse Group representative said at the time that the FI was “reviewing certain aspects of the matter, as is standard practice in similar circumstances.”

The supply chain financing world has been rocked with increasing numbers of defaults since the global pandemic shut down business. Greensill’s business had been previously hit as well by defaults earlier this year as the result of accounting scandals and company collapses.

SoftBank Extracts $700M From Credit Suisse Trade Finance Funds …

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