Report: Kimura Capital Closes Trade Finance Business

Kimura Capital is reportedly closing its London-based trade finance business and returning money to investors.

The company will continue its ventures in commodity logistics and sports management, but a proposed commodity hedge fund will not move forward, Bloomberg reported Tuesday (Dec. 17), citing unnamed sources.

Kimura Capital did not immediately reply to PYMNTS’ request for comment.

The company became a significant lender to commodity trading companies, according to the report.

Its exit from the market comes at a time when the sector has been facing commodity trading frauds and other challenges, per the report.

The International Maritime Bureau (IMB), which is part of the International Chamber of Commerce’s commercial crime division, said in September that a new trade finance threat is emerging in which logistics providers and exporters join forces to manipulate shipping documents and swindle banks.

While the rise in these scams primarily involves importers in West Africa and exporters in China, the use of false or altered shipping information to secure pre-shipment finance and other forms of trade financing is difficult to detect and poses a significant risk to banks everywhere, IMB said.

It was reported last week that Stenn, a U.K. FinTech that specialized in invoice financing for small- to medium-sized businesses, was placed into administration — a type of insolvency procedure — earlier this month after a reference to it appeared in a U.S. indictment in a money laundering case.

That reference led Stenn’s lenders, including banking giant HSBC, to begin examining potentially suspicious transactions, the Financial Times reported Wednesday (Dec. 11).

At the same time, the trade finance sector has seen partnerships, fundraising and the digitization of the processes — invoicing and documentation — and payments, including supply chain finance, that seek to help close trade finance gaps, PYMNTS reported in October.

The Bank of New York Mellon Corp. (BNY) and Mizuho Bank said in October that they are collaborating to provide trade services to corporate clients in Asia.

The banks have formed an agreement for correspondent bank network capability for international trade and will collaborate in a way that leverages both institutions’ expanded trade network to provide expanded connectivity to clients.