STEEL magnate Sanjeev Gupta’s GFG Alliance has initiated legal action to stop creditors from taking over its subsidiary in the British Virgin Islands, The Guardian reported.
Gupta has been struggling to preserve his commodities and energy empire since March after the collapse of his major financial backer, Greensill Capital.
Last month, GFG’s creditors started proceedings to put one of its companies, Simec UK Energy Holdings, into receivership to recover their money.
The dispute came to light because the company holds a 43 per cent stake in Britain’s largest tidal power company, Simec Atlantis Energy (SAE), and the latter had to update the stock market about the recent development, the newspaper said.
SAE stated that GFG had informed it of the legal action, which is intended to “challenge the validity of the receiver’s appointment”.
SAE operates the world’s biggest tidal stream project in Pentland Firth, off the coast of John o’Groats, near Great Britain’s northernmost point, and is also developing projects off the coasts of Japan, China and France.
Gupta bought his stake in SAE in 2018, and as part of the deal SAE added the branding and name of Gupta’s Simec energy interests. GFG also has the right to appoint two people to SAE’s board.
Creditors have been trying to recoup money from other GFG companies as well.
Earlier, representatives of Credit Suisse had started a procedure to push Liberty businesses in London and New South Wales, Australia, into insolvency.
Meanwhile, GFG has not revealed the identity of the creditor that appointed the British Virgin Islands receiver, and a spokesperson declined to comment on Wednesday (9), the report said.
The recent developments have mounted pressure on Gupta, who is already facing an investigation by the UK’s Serious Fraud Office.
The ongoing investigation has made it more difficult for Gupta to find a new lender to replace Greensill.
