The work today was dragged into the Greensill scandal after its shadow was revealed defense secretary John Healey lobbied ministers to hand over £ 200 million in COVID-19 loans “without delay” to the cashless company.
Shadow Defense Secretary wrote to Business Secretary Nadhim Zahawi in May 2020, urging him to give Greensill, managed by Australian financier Lex Greensill and Liberty Steel owners, greater access to the Coronavirus Big Business Interruption Loan Scheme [CLBILS].
Mr. Healey said that Liberty needed the money and “your request for CLBILS remains dependent on your lender, Greensill, being accredited for the higher capitalization loan scheme, which I believe can now be done without delay.”
Mr Healey told the Financial Times today that he felt his letter was the right thing to do as ‘the local MP’ for Liberty Steel’s Rotherham factory, just as Labor demanded a new law on political lobbying and accused the Conservatives from being ‘consumed by patronage’.
He said, ‘I was doing my job for the big Rotherham plant that Liberty recently bought and expanded’.
His involvement was revealed by Sunak, who counterattacked yesterday through an aide who said: ‘A member of the labor bench was lobbying on behalf of Greensill to be accredited for the higher capitalization loan scheme’.
Parallel Defense Secretary John Healey (left) lobbied Business Secretary Nadhim Zahawi (right) to hand Greensill £ 200 million in COVID-19 loans ‘without delay’. He claims he was protecting jobs in his constituency
Australian financier Lex Greensill, 44, (as he was seen walking his dog in Cheshire on April 5) reassured the team in an internal video on February 15 about the “incredible strength” of an important set of funds maintained with the Credit Suisse, from Zurich, just before the plug was pulled
Mr Healey told the Financial Times today that he felt his letter was the right thing to do as ‘the local constituency MP’ at Liberty Steel’s Rotherham plant.
Greensill’s collapse sent shockwaves across the city and Whitehall, dragging David Cameron, who served as an adviser to the company, and raising questions about Greensill’s access to key politicians and public officials.
Plans to stop the steel tycoon from buying factories at low cost
Job fears: Sanjeev Gupta employs around 5,000 people in the UK, including 3,000 at Liberty Steel
Liberty Steel chief Sanjeev Gupta will be prevented from buying his plants back at bargain prices if they break, according to plans being drawn up by the government.
The metal tycoon’s empire was left on the brink of collapse after its biggest creditor, Greensill Capital, for which David Cameron worked, imploded.
He is struggling to raise money after ministers rejected a £ 170 million bailout from Liberty’s parent company, the GFG Alliance, last month.
Whitehall officials are now concerned that Gupta will declare his steel business insolvent and later try to repurchase it.
This is a process known as ‘phoenixing’ – which the company’s directors are strongly advised against. GFG employs 5,000 people in the UK, of which 3,000 are metallurgists spread across 12 locations.
Boris Johnson said he was “very hopeful” that the government can save freedom and all options – including nationalization – are on the table.
To prevent Gupta from buying back parts of Liberty, authorities are considering naming the accounting firm Deloitte to deal with a possible insolvency that would separate it from the rest of the company, according to The Sunday Times.
A GFG spokesman said: ‘Liberty Steel UK is undertaking important self-help measures … working with our customers to achieve conditions that will bring in money sooner.’
It also put thousands of jobs in the British steel industry at risk, as the GFG Alliance – a network of companies that includes Liberty Steel run by tycoon Sanjeev Gupta – relied heavily on Greensill for funding.
James Murray MP, Shadow Financial Secretary of Labor for the Treasury, responding to the Chancellor’s latest deflections on Greensill, said: ‘This is Chancellor’s desperate thing. In trying to divert attention from his own decisions, he just reminded everyone that his own department had several meetings with Greensill last spring.
‘The chancellor needs to stop trying to pass the ball and start answering questions about why he opened the door for Greensill to lend through the CLBILS Covid loan scheme in the first place, putting hundreds of millions of pounds of public money at risk. .
“And he still hasn’t explained why the Treasury was planning to expand supply chain financing under his supervision.”
Yesterday, it was discovered that the founder of Greensill Capital boasted that his company had “huge” amounts of money to borrow weeks before it collapsed.
Lex Greensill, an Australian banker who is now at the center of a political storm because of his ties to the system, assured employees that the company was in a strong position in a video call on February 15.
However, less than a month later, the administrators were appointed to the creditor, as the creditor admitted that he could no longer operate.
In the video call in February, whose recording was obtained by the Financial Times, Greensill said: ‘We have huge amounts of liquidity at our disposal’.
He added that ‘the markets are far behind us’ and that investors are increasingly interested in his business.
However, less than two months later, most of the more than 1,000 Greensill employees in the UK were fired.
She specializes in supply chain financing, which means she has worked with large companies like GFG and Vodafone to pay their suppliers quickly, in exchange for a fee.
Greensill was effectively lending to companies and would be repaid at a later date, when they had more money released.
Greensill then pooled these loans and sold packages of them to investors, through large asset managers, such as Credit Suisse.
Greensill, 44, told the team in February: ‘One of the things that is a really important detail for us to be aware of is the incredible strength we have in our supply chain financing funds.
“These funds continued to record robust inflows – in fact, we had to slow down inflows.”
Even the former prime minister of Qatar, Sheikh Hamad bin Jassim Al Thani, has invested in £ 145 million in Greensill loans, according to Bloomberg. He will now be preparing for big losses.
Greensill hit rock bottom when he revealed that his insurer failed to renew a life insurance policy and was unable to find a replacement.
The insurance gave investors the confidence to hand money over to Greensill – it covered any losses they would have suffered if any of the Greensill borrowers had not paid the loan.
Pressure was building on Boris Johnson to introduce a lobbying law last night, while David Cameron faced more questions about his proximity to a controversial financier (archive image)
But when that coverage expired, investors like Credit Suisse refused to give Greensill more money to borrow.
Greensill told the team on the February conference call that one of its insurers, Chubb, was “very supportive” in agreeing to an “adjustment” to its policy that would give investors “100% insurance with no coverage gap”.
He said that the senior Greensill team was doing ‘a great job with our friends from [insurance broker] Marsh and with Chubb ‘.
But it appears that the adjustment was never made, precipitating the creditor’s failure just a few weeks later.
Now GFG, one of Greensill’s biggest customers, is teetering on the brink of collapse and government aid of £ 170 million has been denied. It also refuses to make any repayments on its loans due to Greensill.
A bloody court battle is expected to be about who should bear the losses between Greensill managers, their clients like GFG, their insurers, banks like Credit Suisse and the final investors who have invested money in Greensill loans.
The collapse brought Cameron back into the public eye after it was reported that he had sent a message to Chancellor Rishi Sunak trying to gain special access to Greensill for Covid’s emergency loans.
MPs across the House of Commons also called for an investigation into the access Greensill was given to senior politicians after it emerged that he had regular meetings with officials in Whitehall and even helped the Cameron government form a loan scheme for pharmacies. of the NHS.