The Spectacular Bankruptcy of Paul Benfield

By Phin Upham

Paul Benfield had everything. He was a well-known trader throughout the East India Company and rose to hold some political sway in his time. He also became the public target of Edmund Burke, who had more than a few choice words. His exploits would lead to a monumental bankruptcy that made him a political and social topic for gossip.

Benfield made his money in the EITC by making major loans to various businesses with activity in the area. One of his larger investments was to a man named Nawáb, who took Mahratta of Tanjore with the support of the English. That particular loan was related to a claims settlement, and not one settled legally. His actions led to being charged helping malcontents in the Madras council. That put him in direct conflict with the 1^st Baron of Pigot, George Pigot. The EITC ordered Benfield to return to England, where he would face a full review of his actions.

Benfield hid nothing. He even admitted that he had taken extensive measures to keep the loans a secret, but that he had informed the governor of the territory and the council as well. Settling those loans, he argued, prevented full-scale war and advanced company interests.

Apparently, the argument was successful and he was restored to service shortly after.

Benfield’s actions would catch up with him upon his return to England. The council had allowed him to stay in Madras, a position he enjoyed until he felt like returning home. In England. Benfield began speculating on businesses. To the point that he became somewhat addicted to the practice. He speculated primarily through a mercantile firm, perhaps believing his time with the EITC would advance his own intrests. Too many bad bets meant Benfield went under. He lost his fortune and died in poverty twenty years from the foundation of his final business venture.

About the Author: Phin Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phin Upham website or Facebook page.