On 14 May 2021, the Serious Fraud Office (SFO) announced that it had launched an investigation into Sanjeev Gupta’s steel empire putting David Cameron at risk of being drawn into the fraud inquiry.
SFO Investigation | Rosenblatt’s Financial Crime Team
The business empire of Liberty Steel owner Sanjeev Gupta, Gupta Family Group Alliance (GFG), is facing an investigation by the SFO including its links to failed finance company Greensill Capital UK Limited (Greensill).
Last Friday the SFO released a statement confirming that it “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”.
As this is a live investigation the SFO are unable to reveal any further information at this juncture. However, following the SFO’s announcement a spokesperson from GFG noted that they “will co-operate fully with the investigation. Also adding that “as these matters are the subject of an SFO investigation we cannot make any further comment. GFG Alliance 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.”
This follows a turbulent week for Greensill investors after David Cameron told MP’s that he was paid generous amounts by the firm, with the former prime minister stating “I was paid an annual amount, a generous annual amount – far more than I earned as prime minister.” This also emerges amid the scandal that Mr Cameron put pressure on Rishi Sunak through informal channels to request the Chancellor grant Greensill’s application for an emergency funding scheme.
Greensill’s business model places itself between business customers and their suppliers. Greensill buys the suppliers’ invoices at a discount and chases each customer for payment. It has emerged following Greensill’s collapse that the company had approximately £3.6bn exposure to GFG, with GFG being a recipient of financing based on expected invoices for sales that had only been predicted.
It is alleged that one of Mr Gupta’s companies sent Greensill invoices for business it had supposedly done with four European metal companies. These companies when approached by the Financial Times stated that they had not dealt with GFG. In response GFG said the invoices were for products they expect to sell in the future. GFG noted “many of Greensill’s financing arrangements with its clients, including with some of the companies in the GFG Alliance, were prospective receivables programmes, sometimes described as future receivables. As part of those programmes, Greensill selected and approved companies with whom its counterparties could potentially do business in the future.”
We will continue to monitor the SFO’s investigation and provide updates as the case unfolds.
Rosenblatt can help
Rosenblatt has a wealth of experience in financial crime and is uniquely placed to support clients’ that are the subject of a Serious Fraud Office investigation and prosecution having being involved in high profile investigations into a global pharmaceuticals company, a multi-million pound affordable property investment scheme, a multi-million pound pension fraud scheme and a world leading global security company.
https://www.rosenblatt-law.co.uk/services/financial-crime/
