Sanjeev Gupta carved up his business empire to secure more taxpayer-backed loans through disgraced financier Lex Greensill – but was left with far less cash than hoped.
The industrials tycoon split up parts of the GFG Alliance – which is a loose collection of companies – and registered new entities so that they could apply for emergency lending under the Government’s Coronavirus Large Business Interruption Loan Scheme.
It is thought eight companies applied for loans worth up to £50m each – or £400m in total. But in the end he only received one worth £45.6m. This is only slightly more than the £42m the 49-year-old magnate spent on a mansion in the exclusive London district of Belgravia last August.
Move: Sanjeev Gupta split up parts of the GFG Alliance – which is a loose collection of companies – and registered new entities
Gupta’s companies applied for hundreds of millions of pounds of Covid loans through Greensill Capital – the specialist firm run by Lex Greensill and advised by David Cameron.
GFG announced the shake-up to staff in a document called ‘CLBIL Restructuring’ – making explicit the intention was to capitalise on the scheme, according to the Financial Times. Gupta’s companies employ around 5,000 people in the UK including 3,000 at Liberty Steel.
But GFG has been struggling for survival since the collapse of Greensill Capital in March. Cameron has been drawn into a lobbying scandal after it emerged he contacted ministers on behalf of Greensill in order to gain greater access to Covid loans. It is not known if all loans GFG applied for were accepted.
But it is believed that several were initially given the green light but were halted before being released to GFG. It is not clear why this happened – but there were concerns about the lending because the British Business Bank withdrew the Government’s 80pc guarantee for loans to firms controlled by Gupta after it concluded Greensill breached the terms of CLBILS.
A spokesman for GFG said: ‘GFG Alliance sought approval from relevant authorities and worked with multiple legal parties, prior to finalising any loan applications to its lender. GFG Alliance is confident that it abided by all rules that applied to its entities in respect to those loan applications, including rules related to business structure.’
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