African Potash - Run for the Hills: this stinks

Comments

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   VINES

   9 February 2016, 04:08

   ‘‘If you ever want to send a chill down the spine of your banker, just mention the phrase “back-to-back letters of credit.’‘

   shippingsolutions.com/blog/finding-a-bank-for-a-back-to-back-letter-of-credit-may-be-difficult

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   wildrides

   9 February 2016, 06:04

   Spray it with Cilit Bang until the grime has gone .

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   J P Spaghetti

   9 February 2016, 06:09

   “Payment by the buyer will be made via a Letter of Credit from an internationally accredited bank within 30 days of delivery of the Urea Stock”

   Given the reliability of such banks, one inference to draw must surely be that, although it might have been dispatched, the urea stock hasn’t actually been delivered (as yet). Of course, if someone has made off with it that would be the ultimate piss take. BOOM-BOOM!!

   (I thoroughly recommend Bruce Dickinson’s Trooper ale, by the way.)

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   alcira16247

   9 February 2016, 08:07

   Tom

   Your dead right, here! Whole saga has a very nasty smell!

   On issuing a letter of credit the risk passes to the bank. The bank guarantees payment. That’s why banks are stringent on creditworthiness of their client before issuing. If the terms of the letter of credit have been fulfilled no bank would renege on making payment.

   One has to assume African Potash have been unable to fulfil their contractual obligations or have been guilty of fabrication.

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   J P Spaghetti

   9 February 2016, 09:10

   “The bank guarantees payment.”

   But surely only if the goods have actually been delivered?

   “One has to assume African Potash have been unable to fulfil their contractual obligations or have been guilty of fabrication.”

   Or – again – that the stuff that’s good for the garden has been pilfered or lost on the way if so. I mean, even by AIM standards, an outright fabrication would be so beyond the pale as to surely result in a conviction (and perhaps even a bit of bird) and one such as this would be easy to prove (and they’d surely have realised this), non? And the RNS concerned stated that it had actually been dispatched, so that would seem to rule out a failure to fulfil contractual obligations (unless they lied about it having been so, of course!).

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   alcira16247

   9 February 2016, 11:28

   JP

   There’s no doubt whatever has happened must now be clarified by the company.

   Delivery would be either FOB or CIF, assuming it had be made and met specifications, delivery, packaging etc etc there would be no reason why the bank wouldn’t have honoured the letter of credit. Again any sensible buyer doing FOB would have made independent insurance provisions against loss or theft.

   When I imported from third world suppliers FOB was only available….. ie. once product was delivered to a designated port or airport my suppliers contractual responsibilities were fulfilled.

   I’m also assuming the statement ‘internationally accredited bank’ is truthful and thus had the resources to pay-out in the designated currency in the sums quoted.

   As Tom headlines……. it stinks!