The British businessman, Sanjeev Gupta owned GFG Alliance, which acquired the Locabher aluminium smelter, the last aluminium smelter in Britain and the hydropower plant from the global mining and metal giant Rio Tino in a £330 million deal in 2016, is encountering a bankruptcy battle in a UK court.
{alcircleadd}The multinational metal group owned by Sanjeev Gupta has been experiencing a crisis since the fall out of its primary lender Greensill Capital in the previous year, which had financed GFG, with as much as £3.5 billion.
The Swiss investment banking and financial services firm, Credit Suisse was approached with offers of mediation while the French police performed raids at the company’s office. The fate of ‘saviour of steel’ Sanjeev Gupta now resides in the decision of a British Judge.
By borrowing money from Greensill, the failed supply chain lender, Gupta’s GFG has created a void of US$1 billion which is required to compensate Credit Suisse investors.
Last month, the US-based investment bank, Citigroup to take action on behalf of Credit Suisse, filed a petition in London’s insolvency court against some of Mr Gupta’s commodity units and industrial circuits.
Just the previous week, an investigation was initiated to tally the numbers of the accountancy firm supervising the accounts for a wide range of items in the steel magnet’s business federation.
Accounts signed off by King, mainly for four Liberty Steel businesses including the one regulating the smelter will be investigated by the Financial Reporting Council (FRC) which controls the accounting industry.
Liberty Speciality Steels Limited, Alvance British Aluminium Limited previously known as Liberty Aluminium Lochaber Ltd and Steel Newport Limited will have to declare their accounts by 31st March 2019 to the FRC for rigorous scrutiny.
Greensill’s fall from grace resulted in the Serious Fraud Office (SFO) launching an investigation into “suspected fraud, fraudulent trading and money laundering” aiming at GFG. This would bring complications to the company’s future of 35,000 strength workforce, an estimated 3,000 in the UK.
Last month investigators from SFO stormed various GFG sites to demand documents to clarify the allegations against the company.
The company acquired a 14,000-acre estate situated in Ben Nevis which also hosts an aluminium smelter and a hydro plant has come under inspection after the truth manifested itself that Gupta had made a deal in 2016 with the Scottish Government to negate €586 million in exchange for them purchasing energy from the hydro plants.
Another of his firms, Liberty Steel has steelworks in Dalzell, Scotland and Clydebridge. Though in a declaration, GFG was persistent that its businesses were running smoothly.
It exclaimed: “Our core international businesses continue to generate strong returns and achieve record production levels.
“We remain committed to repaying all creditors and continue to make positive progress toward a consensual debt restructuring that’s in the best interest of all stakeholders.”
Only a few days back, GFG’s Dunkirk aluminium smelter and Paris offices were torpedoed by French police as a part of the investigation methodology used by the Paris prosecutor’s office which claims the company has misused corporate assets and laundered money.
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