Vast majority of RGB Resources transactions look bogus, says liquidator

The vast majority of recent transactions by the collapsed metals trading company RBG Resources appear to have been bogus, the company's liquidators said yesterday.

RBG, controlled by one of the UK's wealthiest Asian businessmen and advised by several prominent politicians, is being investigated by the Serious Fraud Office over claims that it used faked documents to secure loans from investment banks including WestLB Panmure. It is also named in a US court complaint alleging a $600m (£430m) scam to defraud many of the world's biggest banks.

The liquidator Malcolm Shierson, a partner at Grant Thornton, said the investigation to establish the company's true financial position would be "lengthy and painstaking" because of its complicated ownership, involving offshore family trusts, and because of the multitude of cross-border transactions. He said: "Our initial findings reveal that a significant proportion of the company's trades over the past year appear to be questionable."

RBG was controlled by Virendra Rastogi, one of the UK's wealthiest Asian businessmen, and advised by the former Cabinet minister Jack Cunningham. The company was put into liquidation earlier this month after its auditors resigned, saying they could not verify some trades.

It is claimed that many of the documents showing metals assets, against which the company borrowed money, included false addresses. Grant Thornton agents have been chasing up supposed counter-parties to RGB trades in India, Hong Kong, Switzerland and the United Arab Emirates as well as the US. It is alleged that many of the trails lead to street numbers and floors of buildings that do not exist. It emerged yesterday that, while some counter-parties are real metal traders, the auditors have yet to verify a single trade.

Mr Shierson said: "It will be several weeks before we begin to develop a full and accurate understanding of the business's financial position."

Mr Rastogi was arrested at the start of this month on suspicion of shredding documents. His brother, Narenda Kumar Rastogi, was among four men arrested in the US earlier this week as authorities there investigate bogus metals trades that cost global banks at least $600m, and perhaps as much as $1bn – one of the biggest frauds ever alleged.