Greensill-linked firm accused of breaching contract with £250m overloan to Gupta's steel empire.
A high court hearing has revealed that Greensill Bank AG, linked to financier Lex Greensill, failed to act in good faith when it lent an additional £250 million to businesses owned by steel magnate Sanjeev Gupta during the pandemic. The company is suing the Department for Business and Trade (DBT) for around £331 million over claims it wrongly terminated guarantees on Covid loans.
The dispute centers on a coronavirus business interruption loan scheme, where accredited lenders like Greensill Capital UK (GCUK) were allowed to lend money to companies backed by an 80% government guarantee. GCUK was the principal financial backer of Gupta's GFG Alliance, which includes Liberty Steel. The company had forged a close relationship with Greensill to finance its metals businesses.
The hearing has shown that the DBT terminated guarantees on loans given to six companies owned by Gupta after discovering they were "ultimately owned" by him. However, lawyers for GBAG claim this was an unlawful breach of contract and the government acted "capriciously". The company is seeking more than £331 million in damages.
A senior barrister representing the DBT argued that the government had lawfully determined GCUK had failed to act in accordance with the terms of the scheme guarantees by giving money to Gupta's companies. However, GBAG denies this claim and alleges there was "considerable political pressure" from the DBT to allow GCUK to lend money to Gupta's companies.
The dispute raises questions about the government's handling of state support for businesses during the pandemic, including its relationship with Greensill Capital UK. Former Prime Minister David Cameron has also been drawn into the controversy after it emerged he lobbied the government on Greensill's behalf to secure state support.
A high court hearing has revealed that Greensill Bank AG, linked to financier Lex Greensill, failed to act in good faith when it lent an additional £250 million to businesses owned by steel magnate Sanjeev Gupta during the pandemic. The company is suing the Department for Business and Trade (DBT) for around £331 million over claims it wrongly terminated guarantees on Covid loans.
The dispute centers on a coronavirus business interruption loan scheme, where accredited lenders like Greensill Capital UK (GCUK) were allowed to lend money to companies backed by an 80% government guarantee. GCUK was the principal financial backer of Gupta's GFG Alliance, which includes Liberty Steel. The company had forged a close relationship with Greensill to finance its metals businesses.
The hearing has shown that the DBT terminated guarantees on loans given to six companies owned by Gupta after discovering they were "ultimately owned" by him. However, lawyers for GBAG claim this was an unlawful breach of contract and the government acted "capriciously". The company is seeking more than £331 million in damages.
A senior barrister representing the DBT argued that the government had lawfully determined GCUK had failed to act in accordance with the terms of the scheme guarantees by giving money to Gupta's companies. However, GBAG denies this claim and alleges there was "considerable political pressure" from the DBT to allow GCUK to lend money to Gupta's companies.
The dispute raises questions about the government's handling of state support for businesses during the pandemic, including its relationship with Greensill Capital UK. Former Prime Minister David Cameron has also been drawn into the controversy after it emerged he lobbied the government on Greensill's behalf to secure state support.
This whole thing is just wild, you feel? Like, I get why there's a dispute over £250m, but then there's this whole "political pressure" vibe that comes in... 
David Cameron's name pops up and now people are like "oh no, what did he do?" 
But at the end of the day, it's about two companies trying to make a buck off each other. 
And the government's all like "we're just doing our job" 
but really, they're playing with fire when it comes to state support and business loans. 
This whole thing needs some serious scrutiny... 
I'm so over this stuff. They're suing each other like a bunch of kids in a playground, but what really gets me is that they're still trying to figure out who came up with this mess. Like, come on guys, £250m is a lot of money! Can't you all just agree on something? And what's with the government and Greensill working together like they're some kind of special team? 
I mean, I get it, the pandemic was crazy, but that doesn't mean we can just rewrite the rules later. 
. Now they're crying foul, like they didn't get taken for a ride 
. The DBT just did their due diligence, and Greensill's all about the benjamins 
.
... anyway, back to this news. So Greensill linked firm is being sued for £331 million? Like, shouldn't they just be more careful with their contracts? It's not like the government didn't provide a scheme that was supposed to support businesses, but I guess that doesn't excuse their mistakes.
.
I'm still trying to wrap my head around this whole thing... so like, Greensill was lending money to Gupta's steel empire and everything seemed fine at first but then they found out that all these loans were being funneled back to the government through some coronavirus scheme... 
I don't know, maybe I'm just not seeing the whole picture here... but it all feels a bit suspicious to me.
I could swear I commented on something similar last week... or was that two weeks ago? 
Hmm, can't quite remember...
This is just so frustrating... like you can feel the anxiety and desperation from companies that got caught in this mess. £250 million overloan? That's insane! And for what, to help Gupta's steel empire? 
. what really got my attention though was david cameron getting involved in all this - he lobbied the gov't on greensill's behalf? 
.