Refco faces more woes as FX unit sale falls through
Bankrupt financial services group Refco has failed to sell its foreign exchange brokerage, and its securities broking arm has been ordered to pay $122 million compensation to a Russian customer.
Forex Capital Markets' chief executive, Drew Niv, blamed indecision on the part of Refco's creditors: "We knew the creditors were unhappy with our bid, but every time we raised it, they would not give us a firm counter-offer with a real price attached to it," he told a financial newswire.
Meanwhile, the UK High Court ordered Refco Securities to pay Russia's largest bank, OAO Sberbank, $122 million for failing to return Russian government eurobonds Refco was holding as collateral on a loan to Sberbank.
Refco filed for bankruptcy in October last year after accountants discovered $430 million in concealed debts. Chairman and chief executive Phillip Bennett is now on trial, having pleaded not guilty to charges of fraud.
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