Vesttoo LOC-linked investor group named as Yu Po Holdings from Hong Kong

Court filings and confirmation from sources have revealed a missing piece of information related to the invalid or fraudulent letter of credit (LOC) issues affecting Vesttoo facilitated collateralized reinsurance deals, with a Hong Kong investor group named Yu Po listed as a target for pre-trial discovery.

Yu Po Holdings Limited and Yu Po Finance Limited are both entities named as discovery targets under the Chapter 15 filing of the joint provisional liquidators of White Rock Insurance (SAC) Ltd. and the Aon-operated segregated cell company and transformer vehicle.

As we reported earlier today, White Rock Insurance (SAC) Ltd. and the joint provisional liquidators of the affected cells of the structure, filed a Chapter 15 to gain greater control of the cells exposed to the Vesttoo fraud issues, a move that Vesttoo said was in contempt of the Chapter 11 bankruptcy proceedings.

That aside, the Chapter 15 seeks to secure control over the cells and access to information related to them, part of which would involve a process of discovery that Aon, via White Rock, has been trying to follow for some weeks now.

Discovery, typically a pre-trial process, involves disclosure and information gathering, to provide the necessary transparency into whatever events are subject to legal proceedings.

In this case, the JPLs and White Rock SAC want to get discovery from all of the banks involved in the Vesttoo scandal, as well the clearing house and Federal Research Bank, plus also these Hong Kong based entities.

We’re told Yu Po Holdings and Yu Po Finance are entities of the main investor behind the LOCs that have now been found to be invalid. The entities have both been made dormant as of August 21st, which could be an accounting necessity, or may be something else.

Our sources tell us that Yu Po Holdings was the main investor entity behind most of the Vesttoo-facilitated reinsurance deals where the China Construction Bank (CCB) provided letters of credit (LOC) on its behalf.

There are now numerous letters-of-credit known to be invalid, just in the case of Aon’s White Rock they are said to number 37 and represent $2.35 billion in value.

Yu Po Holdings was supposed to be the provider of collateral in the reinsurance transactions in question, while CCB issued the LOCs to guarantee this.

But, with LOCs now claimed to be invalid by that bank, it raises questions over any investors involved as well, hence the discovery process that is being requested.

Recall, that Aon’s White Rock was seeking the return of $136.7 million in collateral that it had distributed to Vesttoo, after the insurtech delivered letters of credit (LOCs) that were supposed to have backed up these funds.

Sources told us that Yu Po Holdings, either the entity or its representatives, had been through and passed KYC, as well as other checks from various parties in the transactions in question.

The Hong Kong based investor entity was involved in numerous transactions that Vesttoo facilitated, we understand and was presumably supposed to have been a main backer, in reality or otherwise, of collateral to support Aon’s intellectual property (IP) transactions.

Court filings under the Chapter 15 state that Aon began using Vesttoo as a market maker of sorts in the fourth-quarter of 2021, after which Vesttoo entities sourced LOCs for transactions.