Starcom’s Ajay Aggarwal sought financial bailout from Liberty’s Sanjeev Gupta for Lempriere Grain

The court examination of the Lempriere Grain collapse had a remarkable twist this week. Read about the link to a steel tycoon.

One of Lempriere Grain’s owners sought the help of Liberty House steel tycoon Sanjeev Gupta to bail out the grain-trading business.

A key figure in the 2019 collapse of Australian grain trader Lempriere Grain tried to sell his half share in the joint venture to global steel tycoon Sanjeev Gupta.

Ajay Aggarwal, owner of Singaporean company Starcom Resources Pte Ltd, which owned a 50 per cent stake in Lempriere Grain along with Toorak businessman Will Lempriere, spent much of 2018 trying to sell his Starcom companies to Mr Gupta.

Mr Gupta is the white knight who bought the ailing Whyalla steelworks in early 2017 after it fell into administration but has recently been caught up in the collapse of its major funder, Greensill Capital.

Evidence presented at a Federal Court examination of Lempriere Grain’s affairs yesterday, shows Mr Aggarwal wanting to keep Lempriere Grain alive in its dying months so that he could sell his Starcom Group to Mr Gupta.

A hearing on Monday heard evidence that Lempriere Grain was probably insolvent for most of the period from 2010 until its eventual collapse in March, 2019, with losses of $19.4 million.

Anthony Cheshire, SC, barrister for Lempriere Grain’s liquidators Andrew Spring and Trent Devine, suggested on Monday there were problems paying growers for their grain from 2010 until the trader failed.

Yesterday, Mr Cheshire presented the court with an email from Mr Aggarwal to Mr Lempriere on January 20, 2018, where he said “the only real solution I have for this is to sell Starcom”.

Mr Aggarwal detailed three potential buyers for Starcom, with the most likely bid from Mr Gupta’s Liberty group.

“According to my brother in law (sic), Gupta wants us and has been chasing him almost daily for the status,” he told Mr Lempriere.

“You met him and know more or less what he wants, trading flows plus investment opportunities with focus on Australia.”

Mr Aggarwal’s brother-in-law is Sanjay Tohani, who worked for Liberty Steel’s parent company GHG Alliance.

Mr Aggarwal said told Mr Lempriere he was confident of securing a deal with Liberty.

“Think within the next 2 weeks we will know what direction we are heading in on above,” he said.

“We need to somehow keep this alive till we can get to a stage where we can get a sale done.

“Jonny (Lempriere Grain director Jonathan Holdsworth and the grain trader’s manager) is under extreme pressure and seems to think we (are) going to throw him under the bus.”

Mr Aggarwal told the court Starcom had entered into a memorandum of understanding with Liberty House for the sale of the Singaporean group but the deal fell through in early 2019.

He said they were working on a sale price of $US15 million to $US16 million.

Mr Aggarwal told the court he was also negotiating a bridging loan with Starcom’s original funder, EFA Group, through LH Asia Trade Finance Fund.

Earlier Starcom Resources controller of finance and administration Soo Kiam Leng, told the court LH Asia had provided Starcom with $US50 million in a line of credit, with a further $US10-$US20 million from other funders.

Mr Soo said Starcom was buying grain from Europe and Australia for shipment to Asian markets.

He said Starcom would provide pre-finance to Lempriere Grain to purchase grain from Australian growers

Documents presented by Mr Cheshire showed that by January, 2019, Lempriere Grain was already more than 90 days in arrears in paying some growers.

In text messages to Mr Holdsworth on January 14, 2019, Mr Aggarwal said he was doing his best to find a solution and was “meeting Sanjeev in London next week where I need to basically ask him to bail us out”.

“We need to hang on for a bit and get one of these solutions to work,” he said.

“Under extreme pressure from everywhere at the moment and desperately trying to find a solution — the word desperate doesn’t go anywhere near covering it.”

Within two months, Mr Spring and Mr Devine were called in to take over the company.

Mr Aggarwal told the court Starcom Resources ceased operating and was in the process of being wound up with debts of $US14-$US15 million to its funders.

“It has no significant assets,” he said.

Mr Aggarwal is now living in London in a rented house with his wife, and working for the Liberty companies since about August, 2019, on a salary of £10,000 a month.

He does not have any significant assets, other than some “worthless” shares in Starcom.

He sits on the board of Liberty’s Czech Republic company, alongside Mr Gupta.

The Federal Court hearing continues.

MORE

LEMPRIERE GRAIN MAY HAVE TRADED WHILE INSOLVENT

LEMPRIERE GRAIN OWNERS SUBMIT DEBT OF $10.4 MILLION

CREDITORS TOLD THEIR MONEY "IN A HOLE"