Sanjeev Gupta’s offices raided as SFO steps up probe: Now UK investigators target metals magnate just days after French swoop
The Serious Fraud Office has raided several sites in the UK linked to the empire of industrialist Sanjeev Gupta.
As part of the probe into the tycoon’s GFG Alliance, investigators visited locations in England, Scotland and Wales in order to seize documents and interview staff.
The move marks an escalation of the SFO inquiry into Gupta’s metals empire launched in May last year.
Investigation: Steel tycoon Sanjeev Gupta (pictured) has been under scrutiny ever since the company’s largest lender Greensill Capital collapsed last year
Days ago French police raided GFG’s offices in Paris and an aluminium smelter in Dunkirk as part of an investigation into allegations of money laundering and misuse of corporate assets.
In an internal memo to employees, Jeff Kabel, the chief transformation officer at Liberty Steel, part of GFG, said the company would comply with the SFO’s information request orders and ‘continue to cooperate fully in all manners’.
He added the company ‘consistently rejected any wrongdoing’. GFG declined to comment on the SFO visits.
The latest raid is a further embarrassment for the Scottish government, which has been accused of risking nearly £600million of taxpayer cash in a deal to help 50-year-old Gupta purchase the Lochaber smelter in the West Highlands in 2016.
Gupta’s intervention helped secure 160 jobs at the site, which was facing closure when it was put up for sale by its previous owner Rio Tinto.
The deal with the Scottish government was designed to help raise funds for the acquisition.
But Gupta’s empire is now under investigation.
GFG Alliance owns a collection of businesses in the metals and energy sectors and employs over 30,000 people.
Gupta, who was once dubbed the ‘saviour of steel’, has been under scrutiny ever since the company’s largest lender Greensill Capital collapsed last year.
GFG used supply chain financing offered by Greensill to accelerate payments for its products. Supply chain financing consists of loans made to companies waiting for invoices to be paid by customers. When these are paid the cash is used to pay back the loans with interest.
Such funding is a legal method of managing cash flow, but the SFO inquiry is examining the relationship between GFG and Greensill amid suspicions of fraud and money laundering.
Greensill went bust after the company’s insurer refused to renew its cover for the loans the firm had made. The collapse ensnared former prime minister David Cameron, who was hired by the lender as an adviser after leaving Downing Street.
Since then, GFG has been grappling with investigations by the authorities while also trying to seek out a new source of funding as it teeters on the brink.
The company has overhauled its UK steel business and changed some of its management.
The international group, which was founded in 1992, also recently announced plans to cut 160 jobs from one of its main production sites at Stocksbridge in South Yorkshire.
Concerns about GFG’s operation were raised by MPs last November when a report from Parliament’s Business, Energy and Industrial Strategy Committee highlighted that the firm’s structure had exhibited several ‘red flags’ and ‘systemic risks’ that should have alerted authorities to potential problems.