Greensill shipped all government loans to companies associated with Gupta.

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According to documents reviewed by the Financial Times, every taxpayer-backed loan provided by Greensill Capital under the government scheme went to companies associated with metallurgical tycoon Sanjeev Gupta.

Greensill, once a highly regarded financial startup that collapsed in March, is at the center of a financial and political scandal involving former British Prime Minister David Cameron. As a paid advisor to the firm, he lobbied for greater access to government coronavirus lending schemes.

The lender’s close ties to the steel conglomerate GFG Alliance Gupta have also come under scrutiny. The UK Serious Fraud Authority announced last month that it started an investigation on suspicion of fraud and money laundering at GFG, including its “financial arrangements” with Greensill. The companies denied wrongdoing.

Last year, Greensill gained access to the Coronavirus Large Business Interruption Loan (CLBILS) program, which the UK government created at the height of the pandemic to help companies weather the crisis. Greensill provided loans to CLBILS through its German banking subsidiary. The management of the subsidiary is currently under criminal investigation following a regulatory complaint.

The bankrupt bank administrator’s report showed that he made eight loans to CLBILS, of which seven were to companies that are part of Gupta’s GFG Alliance and the eighth to a company that “could be attributed to the Gupta Group.”

Although the names of the borrowers are not included in the report, the FT saw another document that lists the names of the beneficiaries of the CLBILS loan. The seven GFG Alliance companies are: Liberty Pipes (Hartlepool), Liberty Steel Newport, Simec International (UK), Liberty Commodities, Liberty Industries UK, Liberty Merchant Bar and Specialty Steel UK.

Eighth Borrower – Aar Tee Commodities (UK), a metals trading company owned by Companion of Gupta Ravi Trehan… The 62-year-old businessman previously owned a minority stake in Liberty Commodities and previously served on the board of directors of the GFG charitable foundation.

GFG Alliance and Greensill Capital declined to comment. Aar Tee previously told the FT that this is a “separate independent business” for GFG.

Greensill Capital Offices in Warrington, England
Greensill Capital, which collapsed in March, found itself at the center of a financial and political scandal © Anthony Devlin / Bloomberg

Greensill was authorized to provide only £ 50 million to one company under the emergency lending program, with 80% of each loan guaranteed by the UK government.

However, the financial firm gave £ 400 million to eight Gupta-related companies on the grounds that they were not part of a consolidated legal entity, but a disparate collection of separate businesses owned by the metallurgical tycoon, his father and partner.

Theft previously discovered that Gupta set up new businesses last year to further divide his empire with the sole purpose of getting more taxpayer-backed loans through Greensill. GFG has named the reorganization plan “CLBIL Restructuring”.

A document from the German administration shows that the state-guaranteed portion of the eight loans is 356 million euros, and that 44 million euros of this amount are currently “overdue”.

GFG previously told the FT that only one of its UK companies received £ 45.6 million in funding under the scheme. People familiar with the loans said that some of them were used to replace existing debt from Greensill, not to provide new financing.

The administrator’s report said British Business Bank, the state development bank that oversaw the CLBILS scheme, suspended loan guarantees in March as Greensill began to unravelbased on “evidence that [Greensill Capital] violated the terms of the guarantee agreement ”.

British Business Bank has repeatedly refused to disclose any information about the amount of funding for which Gupta and his associates applied for the scheme. The lender launched an investigation in October after the FT first discovered that several companies associated with Gupta have attracted CLBILS loans.

“It would be inappropriate to comment on individual cases given the commercial sensitivity,” British Business Bank said.

Greensill also provided loans under a separate government scheme to small businesses. According to the administrator’s report, under this scheme, Greensill Bank has a guaranteed debt in the amount of 16 million euros, provided to borrowers who are “not associated” with Gupta.

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