UK shipbroker Braemar has revealed it became suspicious in the summer of last year that some tankers it had handled the sale of were eventually ending up in the Russian shadow fleet.

The Financial Times reported in October that the London-listed company acted as a broker for at least nine complex sale-and-purchase deals between December 2022 and August 2023 for vessels that later became involved in Russian trades.

These involved a UK-based financier and were ultimately funded by Russia’s second-largest oil producer, Lukoil.

It is not alleged that any of the transactions broke laws, but they highlighted the complex nature of deals for elderly ships that have moved to the Russian shadow fleet for inflated prices.

Chief executive James Gundy told an earnings call on Friday: “We made very clear there was no wrongdoing.

“In these transactions, you’ve got banks, you’ve got lawyers doing escrow, everyone’s doing their KYCs [know your customer]”, he explained. “We have a very, very strict and strong KYC department.”

Gundy said he has zero tolerance regarding this kind of deal.

“In that situation, yes, we admitted that we did some transactions at the time, and still as of today, those parties involved in that transaction are not sanctioned,” he added.

“We became suspicious in the summer of 2023 that some of these ships were coming out of the marketplace and falling into the shadow fleet to try to trade primary Russian business,” Gundy said.

“So we stopped doing those business transactions.

“Six months later, the government came out and said very clearly that irrespective of KYC clearance, if you as the broker are suspicious that that ship will fall into that shadow fleet, then you have to report that or stop trading those deals,” the CEO told the call.

“As far as we were concerned, we were ahead of the curve in that,” he added.

Chief operating officer Tris Simmonds added that Braemar has a “very dynamic live KYC process”, with more than 1,000 counterparties in the system.

“We check any changes in status on individuals, corporate entities or ships that we may have transacted with.

“And if we have any reason to believe that their activity would suggest that they could become or have become part of the dark fleet, then we’ll no longer trade with them,” he said.

Chief financial officer Grant Foley added Braemar had turned business away because it was not comfortable with it.

The comments came in a week during which Braemar reported its financial results for the first half of the financial year.

In the six months to 31 August, the group logged net earnings of £2.1m ($2.7m), against £1.6m in the same period a year ago.

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