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The UK’s serious fraud office has opened an investigation into alleged fraud, fraudulent trade and money laundering in Sanjeev Gupta’s metal empire, including his relationship with the collapsed Greensill Capital.
The SFO said on Friday that it was examining “the financing and conduct of the business of the Gupta Family Group Alliance (GFG), including its financing agreements with Greensill Capital UK”.
The anti-implant agency has been under intense pressure to investigate the Gupta steel conglomerate after reporting to the Financial Times that it revealed that GFG provided suspicious bills to Greensill in exchange for cash. GFG has denied the lack of unlawful acts and Greensill was not forced to check the bills.
According to people close to the investigation, the SFO has been talking to the complainants for about a year.
The SFO statement comes as GFG has been hampered by the collapse of its main financial financier Greensill, a finance group where former Prime Minister David Cameron was an adviser.
The lone GFG conglomerate of companies including Liberty Steel employs 35,000 people in metal mills stretching from Wales to Australia.
He recently sought a £ 170 million state bailout of Liberty, the UK’s third-largest alloy producer with 3,000 employees. The request was rejected by the UK government.
GFG said it would “fully cooperate” with the SFO investigation. He added that the group “was making progress in refinancing its operations which benefit from the operational improvements it has made and the very strong markets for steel, aluminum and iron ore”.
The group has held talks with White Oak Global Advisors, a privately funded company based in the United States, on a £ 200 million loan to provide emergency working capital for its Yorkshire steelworks, but any deal it is still subject to due diligence.
In previous cases, the anti-implant agency has been secretly assessing matters privately for several years before formally announcing them, as in the case of British American Tobacco, which began in 2015 but was officially launched in 2017. .
Overwhelming public interest or market requirements are the key factors in getting a probe into the public domain.
The SFO will examine the links between GFG and Greensill, including the basis on which funding was expanded. In April, the Financial Times revealed that a number of companies named on invoices delivered to Greensill in exchange for cash had denied ever having done business with GFG. Gupta later told FT that one of these companies had been categorized as a “potential” customer and that funding was being provided on that basis.
Commodity trading houses have also initiated investigations after registering similar web domains in their account at the email address of a GFG employee.
The SFO took over the GFG probe at a vulnerable time, as last month it torpedoed a lawsuit against two former Serco executives for failing to share certain evidence with the defense. Director Lisa Osofsky is under pressure to get high-profile convictions, following a series of negotiations that have saved the company’s top professionals.
Politicians, including Conservative MP Richard Fuller, had called on him to launch an investigation, following several separate investigations into the Gupta-Greensill network.
Greensill had a $ 5 billion exposure to GFG when the financial company collapsed in March.
Credit Suisse seeks to liquidate several Liberty Steel companies in the UK and Australia to recover money from customers who invested in Greensill loans through bank funds.
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