Sanjeev Gupta thanked the minister for playing a key role in securing loans for Greensill | green threshold

0

Sanjeev Gupta thanked Tory Minister Nadhim Zahawi for his “personally instrumental” role in making it possible Greensill Capital in a letter released by the government to award taxpayer-backed Covid business support loans.

Greensill collapsed last year, sparking a lobbying scandal involving former Prime Minister David Cameron and an investigation by the Serious Fraud Office into more than £300m in loans to companies affiliated with the GFG Alliance, the Gupta-led metals conglomerate, under the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Last year the National Audit Office said the state-owned British Business Bank, which has now suspended government guarantees on the loans, allowed Greensill Capital access to the scheme without subjecting the company to detailed audits, leaving taxpayers at a loss of £335m faced.

It emerged that in October 2020, Gupta sent a letter to Zahawi, then Minister in the Department of Economic Affairs (BEIS), thanking him for getting the bank to approve Greensill’s access to the lending program.

“As you were personally instrumental in obtaining the BBB’s approval for Greensill Capital to provide financial assistance under the CLBILS program, it would be very fitting if you could join us in celebrating this special moment of thousands by workers,” Gupta said in the letter, which was released after a Financial Times freedom of information request.

In the letter, Gupta even went so far as to invite Zahawi, who was promoted to education secretary in the autumn, to a “small gathering” at his Rotherham steelworks to celebrate the success of the Greensill loan.

The letter was sent days before a formal investigation was launched into Greensill and the loans to GFG-affiliated companies.

“The Ministry does not recognize the allegation in Mr. Gupta’s letter that Nadhim Zahawi played a role in obtaining the bank’s approval to accredit Greensill Capital,” BEIS said. GFG declined to comment.

BEIS stated that Zahawi “neither replied to the letter nor made a subsequent visit to any GFG Alliance website”.

The FoI also revealed that according to the FT, “a text exchange or phone call took place between Sanjeev Gupta and Nadhim Zahawi at an unknown time” in connection with “Covid Assistance”.

In the FoI Response, BEIS stated that “an electronic record of the communication was no longer stored on the device used by Nadhim Zahawi, which was his personal mobile phone”.

However, according to “Information on the Notice” at BEIS, the minister told the steel baron that “inquiries would need to be routed through BEIS officials,” the FT said.

A spokesman for Zahawi said the decision to accredit Greensill was made independently of the British Business Bank. “The government was not involved in the decision to accredit Greensill,” he said. “The decision was taken independently by British Business Bank in accordance with its usual procedures.”

The spokesman said the GFG’s request for support had been passed to Zahawi by his local Labor MP and Zahawi had told Gupta that requests had to be routed through ministry officials.

“The allegation that Nadhim was instrumental in obtaining the permit is little more than flattery from GFG in a captioned letter from their PR team,” the spokesman said. “He did not reply to the letter or attend the event.”

Greensill Capital, which specializes in supply chain finance, where companies borrow money to pay their suppliers, collapsed last March after losing insurance coverage for loans made to its customers.

It emerged that former Prime Minister Cameron sent 62 text messages to former colleagues asking for help while making millions of pounds as an adviser to Greensill. He had also previously lobbied ministers and officials across government to give Greensill approval to issue Covid loans.

Intensive SMS lobbying by ministers and senior officials on behalf of Greensill Capital shows a “serious lack of judgement”, an official parliamentary inquiry has found.

The Treasury Department’s selection committee said it was inappropriate that the ex-Prime Minister sent 62 messages to former colleagues asking them to help the bank in which Cameron has a “very significant personal economic interest”.

Cameron made millions of pounds as a board advisor to Greensill, the credit startup founded by Australian banker Lex Greensill. Cameron released a series of text messages last year in which ministers and officials lobbied across government to give his employer approval to issue Covid loans.

A parliamentary inquiry found that Cameron displayed a “serious lack of judgment” but did not break lobbying rules. It said: “This reflects the insufficient strength of the rules.”

In June 2020, Cameron Zahawi wrote, “Lex Greensill … says you are very helpful with the HMT and CBILS program,” according to the former Prime Minister’s disclosures to the Treasury Department’s Special Committee, which included no response from Zahawi.

GFG has previously denied wrongdoing and said it will cooperate with the SFO investigation.

Share.

Comments are closed.