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Hello reader,
I’m sure we’ve all had the experience of paying good money for something that wasn’t quite as advertised. But what about stumping up US$14.2 million for something that didn’t even exist?
That’s what happened to Shinhan Securities: In 2019, the South Korean bank put that hunk of change down to buy shares of then-rising WeWork, only to find out that the seller did not actually own any of said stock.
Read on to dive into the complicated legal battle that ensued and is still ongoing.
Today we look at:
- Fake WeWork shares, offshore tax havens, and possible sham representatives
- An Indian bread brand’s US$3.5 million seed funding round
- Other newsy highlights such as StashAway’s newest high-net-worth market and Stability AI’s appointment of filmmaker James Cameron to its board of directors
Premium summary
A maze of a story
Image credit: Timmy Loen
Not to make light of the situation – fraud of any kind is deplorable – but this story about bogus WeWork shares includes companies named Arctic Narwhal LLC (which controls Honey Badger Group Private Limited) and Snow Leopard LLC.
When I read those names, I immediately thought of those nicknames that Google gives to anonymous viewers of GDocs and GSheets.
On a more serious note, the similarity of those names probably signaled that there was mischief afoot… and this is just a small detail from a large and complicated story. I’ll do my best to summarize the whole situation with the following three bullet points, but you really should click in to read the full story because it goes deep.
- So opaque as to not exist: Shinhan Securities’ purchase of WeWork shares from an opaque offshore company, Aurora Grand Limited (Aurora), fell apart after the money was transferred. The bank found out that Aurora did not actually own the shares.
- Opening Pandora’s box: Shinhan sued Aurora and several individuals, including Benjamin Lee, a startup founder and investor, alleging fraud. The lawsuit uncovered a complex web of entities and questionable transactions.
- Peek-a-boo: The case revealed potential irregularities in the transaction, including discrepancies in escrow agreements and the alleged existence of “phantom” employees. These factors cast doubt on the legitimacy of Aurora’s operations.
Read more: A major Korean bank bought $14m in WeWork shares. They were fake
Good morning, hustlers – let’s get this bread!
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