Sanjeev Gupta's Firm Says It Did Nothing Wrong Over Covid Loans

GFG Alliance, the diverse group run by steel magnate Sanjeev Gupta, has said it is confident it acted legally when applying for funds under the government's Covid support schemes.

This claimed Mr Gupta deliberately restructured his group last year in a bid to maximise the number of taxpayer-backed loans that could be drawn upon.

There is concern about the future of Mr Gupta's UK steel interests, Liberty.

The FT said that GFG Alliance's main lender, the now-collapsed Greensill Capital, was authorised to provide a maximum of £50m to a single company under the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

But because GFG is a grouping of businesses, not a consolidated legal entity, it was able to apply for multiple loans.

Citing internal documents, the FT claimed Mr Gupta set up new corporate entities in the UK, with the sole purpose of securing more government loans. GFG Alliance has declined to respond to that specific allegation.

In a statement, the group said it applied for loans to support business activities and preserve jobs in industrial communities in the wake of the Covid pandemic.

It said it was "confident that it abided by all rules that applied to GFG Alliance entities in respect to those loan applications, including rules related to business structure".

GFG Alliance also emphasised that although several of its UK businesses had applied for loans backed by the CBIL scheme, only one of them had received any funds - a total of £45.6m.

The British Business Bank (BBB), which administered the loan scheme, said Greensill Capital was approved to provide funding through the CLBIL scheme last year. It said all accredited lenders were subject to audit by the bank to ensure they complied with the rules.

If serious non-compliance were to be found, the BBB added, it was entitled to take remedial action, including the withdrawal of loan guarantees. However, it emphasised "it would not be appropriate to comment further in Greensill's case, given there is an ongoing investigation".

Liberty Steel's future was thrown into doubt after the collapse of Greensill. A request by GFG to the UK government for £170m to support the UK still operation was rejected by Business Secretary Kwasi Kwarteng.

Despite Mr Gupta's race to refinance his business after Greensill's collapse, he told the BBC earlier this month that none of Liberty Steel's plants will shut "under my watch".

Some investors have also begun legal action to have parts of his metals group wound up.

But Mr Gupta said he and GFG Alliance, Liberty Steel's parent company, were "not waiting for anybody" and were "doing what we can to help our businesses".

"Our overall global operations are profitable, we have refinancing offers, we will refinance, and we will support our UK business also," Mr Gupta told the BBC.

"None of my steel plants under my watch will be shut down," he said.