Gupta’s empire on the brink as ministers reject bailout plea
Ministers have rejected Sanjeev Gupta’s request for a bailout over concerns surrounding the group’s opaque structure.
The steel tycoon wrote to ministers last week asking for a £170m to avert collapse but a senior civil servant has since formally rejected the plea, according to the Sunday Times.
It cited multiple concerns including the group’s structure to doubt that taxpayers’ cash would remain in the UK.
Greensill Capital, which specialises in supply chain finance, was among GFG’s biggest lenders but its recent insolvency has left the company scrambling for cash.
Mirroring the finance firm’s collapse, Credit Suisse, which withdrew funds from Greensill, could also trigger GFG’s insolvency. The bank is believed to have considered calling on its security over Gupta assets, the Sunday Times reported.
The collapse of GFG risks 5,000 jobs in the UK at the firm’s Liberty Steel plant, which employs 5,000 people across 12 steps in the UK. The government has reportedly assembled a task force with unions with plans to step in if it goes bust.
The support would be akin to support granted to British Steel in 2019, which was forced into compulsory liquidation and passed to the Official Receiver.
It was then sold to Chinese steel group Jingye last March but the intervention cost taxpayers nearly £600m.
On Friday a government spokesman said: A government spokesperson said: “The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company, the broader UK steel industry and trade unions.”
The business select committee is also set to launch an investigation into GFG Alliance as separate probes across Europe launched. MPs are expected to investigate what due diligence the government did on Gupta, his links to politicians, his use of state subsidies.