SoftBank-backed Greensill Capital has supplied tens of hundreds of thousands of kilos of UK government-guaranteed loans to 2 corporations related to British metal magnate Sanjeev Gupta that make use of simply 11 individuals.
Greensill, which employs David Cameron, the previous prime minister, as an adviser, was accepted in June to be a lender by the UK’s Coronavirus Massive Enterprise Interruption Mortgage Scheme (CLBILS), which affords debtors a most £200m in debt, with the federal government on the hook for 80 per cent.
The London-based lender then supplied funding by the scheme to 2 metals buying and selling companies linked to Mr Gupta, in response to individuals accustomed to the matter and paperwork seen by the Monetary Occasions.
Whereas the 2 companies have annual revenues of $588m and $493m respectively — effectively above the £45m minimal threshold to qualify for CLBILS — they collectively make use of simply 11 individuals within the UK, in response to current Corporations Home filings.
One of many mortgage beneficiaries is managed by Mr Gupta’s father, whereas the opposite borrower is owned by a longtime enterprise affiliate who has served as a director for a number of of the Indian-born magnate’s enterprises.
Greensill, which counts SoftBank’s Imaginative and prescient Fund as a primary shareholder, has lately supplied billions of kilos of financing to Mr Gupta’s so-called GFG Alliance — a free assortment of family-owned companies in all the pieces from metals to banking that has expanded quickly by takeovers to succeed in turnover of $20bn.
This construction has allowed a number of GFG corporations to use for separate loans from Greensill below CLBILS, because the Alliance is just not a consolidated authorized construction and its members are impartial entities, in response to individuals accustomed to the matter.
The request for loans backed by UK taxpayers was made even because the conglomerate pursues numerous abroad acquisitions. It has lately agreed to purchase a metal mill in France, an aluminium plant in Belgium and a manganese alloy smelter in Tasmania.
Mr Gupta has a detailed relationship with Lex Greensill, whose monetary companies firm specialises in funding linked to invoices. The metals magnate briefly held an fairness stake in Greensill Capital in 2016.
Greensill mentioned it couldn’t disclose “the specifics” of shoppers’ entry to authorities mortgage schemes, whereas noting that the factors for qualifying for CLBILS are “tightly prescribed and controlled by the British Enterprise Financial institution”.
The British Enterprise Financial institution, a authorities physique liable for the assorted coronavirus mortgage schemes that in complete have doled out greater than £50bn, refuses to reveal data on debtors on the grounds of business sensitivity and confidentiality.
The GFG Alliance additionally declined to touch upon the specifics of the loans, citing confidentiality.
“Proceeds from any Covid-related loans would go in direction of supporting companies affected by Covid-19 and sustaining extremely expert jobs in industrial communities throughout our price chain,” GFG added.
Greensill first supplied government-backed funding in July to Simec Worldwide, a commodities buying and selling firm run by the metal magnate’s father, Parduman Gupta, earlier than extending finance the next month to a different metals dealer, Aar Tee Commodities. Simec is a member of the alliance; different member entities have since submitted mortgage purposes by CLBILS.
The Aar Tee group, which is known as for the initials of its founder, Ravi Trehan, has deep ties to the GFG Alliance. Mr Trehan was beforehand listed as one of many 4 members of the GFG Alliance’s strategic board. He additionally served as a director of Simec Worldwide. Each corporations had their 2019 accounts audited by the identical small accountancy agency, King & King, a London-based auditor often utilized by Mr Gupta’s corporations.
Aar Tee informed the FT that whereas it has “a enterprise relationship with corporations throughout the GFG Alliance”, it considers itself a “separate impartial enterprise”. The corporate declined to touch upon its use of government-backed financing however mentioned its wider group was a “proud investor within the UK, with over 300 workers throughout a number of websites”.