Sanjeev Gupta has put seven UK factories up for sale as he tries to save his Liberty Steel Group from collapse.
The troubled metals tycoon, who is being investigated by the Serious Fraud Office (SFO), wants to get rid of the giant speciality steel plant in Stocksbridge, South Yorkshire, which employs 762.
He will also look to sell plants in West Bromwich and Brinsworth, South Yorkshire, which together employ another 268 workers, as he attempts to hold the core of his business together.
Sanjeev Gupta wants to get rid of the giant speciality steel plant in Stocksbridge, South Yorkshire, which employs 762
Liberty – part of Gupta’s GFG Alliance – has also kicked off the sale of its Aluminium Technologies business, which operates plants in Kidderminster, Coventry and Witham in Essex, and its Pressing Solutions business in Coventry. Together these businesses provide jobs for another 475 workers.
The near-collapse of Liberty, which has sent shockwaves through Britain’s steel industry, came after its major lender Greensill tumbled into administration in March.
Gupta, 50, is being investigated by the SFO over ‘suspected fraud, fraudulent trading and money laundering’ and GFG’s financing arrangements with Greensill.
The planned sale of various Liberty plants came after representatives from Credit Suisse, which is owed millions of pounds by GFG through Greensill, met with Gupta in Dubai where he has holed up during the pandemic.
In tense talks throughout the weekend, Credit Suisse and Gupta (pictured) made ‘significant progress’ in agreeing a deal to get the bank and its clients their money back.
But in the towns where Liberty employs hundreds of staff, workers were nervous about what the break-up of the company might mean for their livelihoods.
Miriam Cates, Tory MP for Penistone and Stocksbridge, said: ‘This is clearly an anxious time for steel makers in Stocksbridge, their families, and our community, and I will be available to talk to steelworkers and union reps at the plant this week.
‘I believe passionately that there is a strong future for steelmaking in Stocksbridge, and I will do everything I can to work with the Government and Liberty to find the right buyer.’
She said she had written to Business Secretary Kwasi Kwarteng, urging him to ‘intervene to help find a suitable buyer for the site’.
Clive Royston, who sits on the national executive council for industrials union Community and has been a steelworker at Stocksbridge since 1978, said it had become ‘quite clear that [Gupta] doesn’t want us’.
Royston added: ‘He’s had us for four years and he’s not been a bad employer – he’s never missed payments or anything. But I don’t think he’s ever really understood how Stocksbridge works – we’re a speciality business.’
Stocksbridge makes metals and special alloys for the aerospace and vehicle industries.
Royston said there were worries about who might buy the plant, and urged the Government to be ready to step in if the factory needed a cash injection to keep going.
The Chinese owner of British Steel, Jingye Group, is understood to be eyeing some Liberty assets, but has not yet made a formal announcement of its interest.
Though Stocksbridge was the biggest steel plant in the Liberty group, Gupta said it was ‘not core to the ‘Greensteel’ vision of Liberty’. Under this plan, he is aiming to turn Liberty into a carbon-neutral business by 2030.
Selling the Stocksbridge plant, or running it as a joint venture with another firm, would reduce the amount of cash that Liberty would have to pour into running it – meaning Gupta’s group should have more money available to repay its creditors, including Credit Suisse.
The bank is in ‘advanced discussions’ with Gupta over an agreement that will see it halt legal action against Liberty’s Primary Metals Australia business, while the division refinances so it can pay Credit Suisse back in full.
The two parties also made ‘significant progress’ in agreeing a framework to get Credit Suisse its money back from other GFG firms.
Bank of England alerted NCA in 2019 to Gupta’s Wyelands bank
The Bank of England reported Sanjeev Gupta and the UK bank he owned to the National Crime Agency in 2019.
Governor Andrew Bailey told MPs on the Treasury Select Committee yesterday that problems ‘began to surface’ at Wyelands Bank in late 2018.
He said the Bank’s Prudential Regulation Authority (PRA) was particularly worried about how much Wyelands – which was ultimately owned by Gupta – was lending to the industrials tycoon and his related businesses.
It now appears that the Bank’s investigations may have been what prompted a major probe by the Serious Fraud Office (SFO) into Gupta.
The SFO said earlier this month it was ‘investigating suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct’ of Gupta’s GFG Alliance business network. It did not say how long the probe had been going on for.
In late 2019, Bailey told MPs that concerns about Wyelands loan book led the Bank of England to notify the National Crime Agency of its investigations.
Following more digging, in February 2020 the Bank of England flagged its work to the Serious Fraud Office.
Bailey said: ‘I can’t comment on those concerns because that goes to the basis of what we believe the SFO is doing.’
- Italy’s Aigis Banca, a specialist lender to small and medium-sized businesses, has collapsed due to its exposure to Greensill Capital and Gupta’s GFG Alliance.
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