The Greensill Capital collapse continues to take down its victims, with Sanjeev Gupta's business empire next on the list. In recent updates, his GFG Alliance is under investigation by the Serious Fraud Office (SFO). A press release by the agency stated, “The SFO is investigating suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance (GFG), including its financing arrangements with Greensill Capital UK Ltd.”
It added that no further comments would be made as it is a “live investigation”. Greensill was a major lender to Gupta's businesses. It collapsed earlier in March. GFG Alliance has said it would fully cooperate with the investigation. The conglomerate employs 35,000 people at companies across the globe. Gupta's Liberty Steel alone hosts around 3,000 employees.
The SFO investigation could not come at a worse time for Gupta who was in the process of raising new finance to replace money it once received from Greensill. While the government has promised to save Liberty Steel, the investigation puts a peg on its chance of survival.
In its statement, GFG said it “continues to serve its customers around the world and is making progress in the refinancing of its operations which are benefiting from the operational improvements it has made and the very strong steel, aluminium and iron ore markets.” The news came shortly after former prime minister and former Greensill employee David Cameron defended his lobbying the government to grant Greensill access to a government Covid loan programme.
The company's reliance on Greensill caused many to worry that it might itself be at risk following the finance firm's demise. GFG is in talks with finance firms about providing emergency loans. A request for £170mn from the UK government was rejected.
Earlier, Cameron, who worked for Greensill and lobbied the government on its behalf, appeared before MPs to answer questions about his role. He acknowledged GFG Alliance's close relationship with Greensill.
