Metals mogul Sanjeev Gupta restructured his enterprise empire final yr in an effort to maximise the quantity of UK taxpayer-guaranteed loans he might leverage on the federal government’s coronavirus mortgage program.
Gupta-affiliated firms have utilized for a whole lot of thousands and thousands of kilos in loans by way of Greensill Capital, which appealed to the Coronavirus Giant Enterprise Interruption Mortgage Program (CLBILS). The federal government applied this system on the top of the pandemic to assist companies climate the disaster.
The collapse final month of Greensill, Gupta’s important lender, left its GFG alliance, which employs 35,000 individuals in steel factories stretching from Wales to Australia, struggling for survival.
Whereas Greensill was solely allowed to offer £ 50million to a single firm by way of the emergency mortgage scheme, GFG is just not a consolidated authorized entity however a set of firms owned by the Gupta household.
New paperwork seen by the FT present that Gupta integrated new entities final yr to additional divide his empire, with the only real intention of securing extra taxpayer-guaranteed loans by way of Greensill.
GFG described the brand new construction in a doc produced final yr titled “Restructuring of the DCFTA,” explaining that the reorganization was geared toward capitalizing on this system.
The revelation comes after Chancellor Rishi Sunak confirmed final week that authorities ensures on Greensill’s loans have been suspended whereas the British Enterprise Financial institution, which administered this system, investigates Greensill’s compliance with its phrases.
The company launched the investigation in October after the FT first revealed that a number of firms linked to Gupta had been drawing on CLBILS loans.
Separate public filings from Singapore present that in August and September 2020, the industrialist integrated 4 new Singaporean holding firms – LRC One, Liberty Metal Newport Holdings, LPH Holdings and Liberty Commodities Holdings – to separate the possession of a number of of its UK firms of commercial buying and selling and uncooked supplies. firms.
Possession of a fifth holding firm, referred to as CMB Restructuring, was transferred from Liberty Metal Group to Gupta straight in September, to facilitate one other mortgage, in keeping with paperwork reviewed by the FT.
GFG advised the FT that whereas a number of of its UK entities have utilized for CLBILS loans, solely a type of firms has obtained £ 45.6million beneath the scheme.
“GFG Alliance sought approval from the related authorities and labored with a number of authorized events, earlier than finalizing any mortgage software to its lender,” Gupta’s firm stated. “GFG Alliance is glad that it complied with all guidelines that utilized to GFG Alliance entities with respect to those mortgage functions, together with the principles regarding the construction of the corporate.”
Greensill and his administrator Grant Thornton declined to remark.
Companies owned by Gupta’s relations and associates have additionally borrowed cash beneath the scheme, together with a commodities buying and selling firm legally owned by his 77-year-old father. One other beneficiary was AarTee Commodities, owned by his associate Ravi Trehan.
Singapore filings present that Trehan beforehand held a minority stake in Gupta’s Liberty Commodities enterprise. The 62-year-old businessman additionally attended a foyer dinner hosted by Gupta with members of the Scottish authorities, in his capability as ‘strategic board member’ of the GFG.
“Now we have enterprise relationships with firms within the GFG Alliance, each as suppliers and clients of products and companies,” AarTee stated in a press release. However we’re “a separate unbiased firm pushed by its personal technique and pursuing its personal success. As you say, prior to now we had a small stake in Liberty, and it was bought.
The British Enterprise Financial institution has repeatedly refused to reveal any info on the quantity of funding requested by Gupta and its associates beneath this system.
Final month, the group denied an entry to info request for Greensill, saying the discharge of the data can be “prejudicial to the aggressive pursuits of Greensill Capital.”
The British Enterprise Financial institution confirmed to the FT that it may withdraw collateral beneath the scheme if “a critical non-compliance is recognized”, however stated it “wouldn’t be applicable to remark additional on Greensill’s case being on condition that an investigation is in progress ”.
Greensill granted the CLBILS loans by way of its banking subsidiary in Germany, whose administration is presently beneath legal investigation following a criticism from regulators.
This text has been up to date to quantify the quantity that one among GFG’s firms obtained beneath the CLBILS scheme.