- Thursday, April 25, 2024
By: Pramod Thomas
AUSTRALIAN financier Lex Greensill faces a grilling by British lawmakers Tuesday (11) over his collapsed company Greensill Capital, which has triggered fears of major job losses and accusations of political wrongdoing in the UK.
Greensill, whose group’s demise has hit hard some of the world’s biggest banks and risks thousands of steel-sector job losses worldwide, will appear before the cross-party Treasury Committee.
His appearance comes ahead of UK former prime minister David Cameron facing the same panel Thursday (13) for questions focused on claims of improper government lobbying involving the London-headquartered company.
Greensill Capital, which filed for insolvency in March after having operated for a decade, had clients including steel empire GFG Alliance which employs thousands of workers worldwide.
Headed by Indian-British magnate Sanjeev Gupta, GFG runs Liberty Steel, which could be forced to shut some of its dozen UK plants following the collapse of its main financial backer, according to UK Business Secretary Kwasi Kwarteng.
Greensill Capital’s implosion threatens about 50,000 jobs overall at companies around the world that relied on its financing for their supply chains.
Links to Cameron
Lex Greensill, the 44-year-old son of sugar cane planters, obtained inside access to the Downing Street machine during Cameron’s spell as prime minister in the previous decade.
This after offering to advise the government on financial technology.
Speaking ahead of this week’s hearings, Treasury Committee chairman Mel Stride said the body was determined to discover whether Britain’s finance ministry “responded appropriately” to all lobbying on Greensill Capital’s behalf.
Current prime minister Boris Johnson ordered a senior lawyer to investigate Cameron’s lobbying for the firm in April.
Cameron advised Greensill Capital and sought government support for the stricken company last year via text to finance minister Rishi Sunak, bypassing official channels.
Cameron, who was prime minister from 2010 until he resigned after Britain voted to leave the EU in 2016, has admitted he acted in error but denies any impropriety.
Greensill Capital, which bypassed strict regulations forced upon traditional banks, specialised in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency.
It was creditors including Credit Suisse and the Association of German Banks who last month placed the Australian parent of Greensill Capital into liquidation.
Switzerland’s second-largest bank — rocked also by the bankruptcy of US hedge fund Archegos — has been forced to suspend four funds with an exposure to Greensill totalling $10 billion.
In Japan, Softbank is counting the cost after investing $1.5 billion in Greensill two years ago.
The Association of German Banks counts losses of 2.0 billion euros after investing communities’ money with the Bremen-based subsidiary of Greensill.
