French prosecutors latest to be investigating the Saviour of Steel
Sanjeev Gupta, who was named the Saviour of Steel when he saved jobs and assets with the purchase in 2017 from Tata Steel is facing another challenge as it’s revealed that French prosecutors are investigating his business dealings.
Gupta’s Liberty Steel has faced a torrid 2021 following the collapse of its key lender Greensill Capital in March.
Since then the company has been sued over unpaid debt by Tata Steel and despite a £50m cash injection in October which allowed the Liberty’s Rotherham site to reopen, MPs last week called for an investigation into Gupta and Liberty Steel in the hope of staving off crisis in the beleaguered steel industry.
French prosecutors however who are looking into allegations of misuse of company assets and money laundering by Gupta’s parent company Gupta Family Group (GFG) Alliance, are not the first authorities to start an investigation. The UK’s Serious Fraud Office (SFO) announced in May it was investigating GFG in relation to “suspected fraud, fraudulent trading and money laundering”.
In a statement to Reuters news agency GFG said it was “not aware of any such investigation and refutes any suggestion of wrongdoing in its French operations.”
It is understood that the investigation in France which was launched in July relates to a €18m state-backed loan from Greensill for GFG’s aluminium works with employees claiming that funds disappeared after being deposited in the unit, something first reported in the Financial Times at the weekend. The works which was acquired by GFG in 2018 is Europe’s largest primary aluminium smelter, however last week it was announced the PE firm American Industrial Partners had assumed control of the asset after a GFG default.
The business has already sold or closed some of its French sites however Reuters noted that two remaining factories were currently under court administration. These latest troubles come after GFG confirmed in May plans to sell its “non-core” businesses in the UK including Liberty Aluminium Technologies as well as its aerospace and special alloys steel business in Stocksbridge. At the time the firm said “while being a unique, high quality business servicing marquee customers … is not core to the Greensteel vision of Liberty.”
