Latest news with #GreensillCapital
Yahoo
7 hours ago
- Business
- Yahoo
Credit Suisse was ‘warned' about Greensill three years before firm collapsed
Bosses at Credit Suisse were warned against dealing with the Australian financier Lex Greensill's eponymous company three years before the collapse of his Greensill Capital, which once employed the former UK prime minister David Cameron as an adviser. The 'character judgment' of senior Credit Suisse managers was challenged in anonymous messages they received as early as 2018, which raised concerns over the Swiss bank's dealings with Greensill, according to a report by the Swiss regulator Finma, released under a London court order after a request by the Guardian and other media. The document showed senior managers were warned several times about the risks involved in its business dealings with Greensill and his firm, the 2021 collapse of which contributed to Credit Suisse's shocking demise in March 2023. A message from an anonymous tipster raised 'strong doubts' over the bank's strategy of packaging up Greensill's loans into $10bn (£7.4bn) worth of investable funds for wealthy clients. Greensill appeared at the high court in London this week as a witness in a month-long trial, in which a former Credit Suisse fund is suing the Japanese tech investor SoftBank for $440m over a complex deal it allegedly coordinated with Greensill Capital before its collapse. The Finma report, released as part of the trial, detailed the messages sent to Credit Suisse managers. 'We also have serious doubts about your character judgment in choosing Greensill Capital as a partner in this field, and even more so in giving them the degree of discretion over your clients' money which they appear to have,' the message said. The tipster was also concerned that a 'large proportion' of those loans were to companies in the metals magnate Sanjeev Gupta's troubled steel empire. The message added that the recent collapse of another set of Greensill-backed funds offered by rival asset manager GAM 'should be taken as a strong warning … you need to take care'. One senior manager forwarded the 2018 tipoff to Lex Greensill, adding: 'People in CS are receiving anonymous mails … seriously, you have to rethink your communication strategy!' Greensill Capital, founded in 2011, offered corporate loans, giving companies advances on their invoices in exchange for a fee. But its founder, the Australian melon farmer turned City banker, entered into a series of complex financial agreements and marketed his lender as a tech firm stacked with high-profile advisers including Cameron. Greensill went on to attract a series of large investors including General Atlantic and SoftBank, whose investments were purportedly meant to expand Greensill's activities. 'However, as it later turned out, these funds were primarily used to pay out private investors and to provide Greensill Bank, which was increasingly coming under regulatory scrutiny, with additional capital,' the Finma report stated. 'Under the management of Lex Greensill, the company provide[d] customised suits for its employees, elegant business premises and its own fleet of business jets.' Finma's report, which was compiled in December 2022 after nearly two years of investigations, showed Credit Suisse bosses continued to receive warnings over their dealings with Greensill as late as June 2019. Greensill was, at the time, still on the rise and had hoped to launch a £22bn stock market flotation before the Covid pandemic put its clients and investors under severe financial strain. Greensill eventually collapsed in March 2021, after insurers refused to renew contracts that underpinned its loans. It came amid growing concern over the firm's management and its outsized exposure to Gupta's metals empire, which ultimately sparked a string of financial and political scandals. It forced Credit Suisse to close its $10bn Greensill-backed funds, leaving wealthy customers nursing hundreds of millions of dollars worth of losses and further eroding confidence in Credit Suisse. That led the Swiss regulator, Finma, to launch what became a near two-year investigation into its dealings with Greensill. The full resulting Finma report was never previously released. But key findings, released in February 2023, declared that Credit Suisse 'seriously breached its supervisory obligations' and would face additional oversight for senior managers and important business relationships. The 167-year-old bank collapsed a month later, leading to its emergency rescue by rival UBS. UBS is still trying to recoup money for former investors of the Greensill-backed Credit Suisse funds. Commenting on the Finma report, UBS said: 'This is a legacy Credit Suisse matter. The conduct described in the report pre-dates UBS's acquisition of Credit Suisse.' A representative for Lex Greensill declined to comment. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Guardian
a day ago
- Business
- The Guardian
Credit Suisse was ‘warned' about Greensill three years before firm collapsed
Bosses at Credit Suisse were warned against dealing with the Australian financier Lex Greensill's eponymous company three years before the collapse of his Greensill Capital, which once employed the former UK prime minister David Cameron as an adviser. The 'character judgment' of senior Credit Suisse managers was challenged in anonymous messages they received as early as 2018, which raised concerns over the Swiss bank's dealings with Greensill, according to a report by the Swiss regulator Finma, released under a London court order after a request by the Guardian and other media. The document showed senior managers were warned several times about the risks involved in its business dealings with Greensill and his firm, the 2021 collapse of which contributed to Credit Suisse's shocking demise in March 2023. A message from an anonymous tipster raised 'strong doubts' over the bank's strategy of packaging up Greensill's loans into $10bn (£7.4bn) worth of investable funds for wealthy clients. Greensill appeared at the high court in London this week as a witness in a month-long trial, in which a former Credit Suisse fund is suing the Japanese tech investor SoftBank for $440m over a complex deal it allegedly coordinated with Greensill Capital before its collapse. The Finma report, released as part of the trial, detailed the messages sent to Credit Suisse managers. 'We also have serious doubts about your character judgment in choosing Greensill Capital as a partner in this field, and even more so in giving them the degree of discretion over your clients' money which they appear to have,' the message said. The tipster was also concerned that a 'large proportion' of those loans were to companies in the metals magnate Sanjeev Gupta's troubled steel empire. The message added that the recent collapse of another set of Greensill-backed funds offered by rival asset manager GAM 'should be taken as a strong warning … you need to take care'. One senior manager forwarded the 2018 tipoff to Lex Greensill, adding: 'People in CS are receiving anonymous mails … seriously, you have to rethink your communication strategy!' Greensill Capital, founded in 2011, offered corporate loans, giving companies advances on their invoices in exchange for a fee. But its founder, the Australian melon farmer turned City banker, entered into a series of complex financial agreements and marketed his lender as a tech firm stacked with high-profile advisers including Cameron. Greensill went on to attract a series of large investors including General Atlantic and SoftBank, whose investments were purportedly meant to expand Greensill's activities. 'However, as it later turned out, these funds were primarily used to pay out private investors and to provide Greensill Bank, which was increasingly coming under regulatory scrutiny, with additional capital,' the Finma report stated. 'Under the management of Lex Greensill, the company provide[d] customised suits for its employees, elegant business premises and its own fleet of business jets.' Finma's report, which was compiled in December 2022 after nearly two years of investigations, showed Credit Suisse bosses continued to receive warnings over their dealings with Greensill as late as June 2019. Greensill was, at the time, still on the rise and had hoped to launch a £22bn stock market flotation before the Covid pandemic put its clients and investors under severe financial strain. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Greensill eventually collapsed in March 2021, after insurers refused to renew contracts that underpinned its loans. It came amid growing concern over the firm's management and its outsized exposure to Gupta's metals empire, which ultimately sparked a string of financial and political scandals. It forced Credit Suisse to close its $10bn Greensill-backed funds, leaving wealthy customers nursing hundreds of millions of dollars worth of losses and further eroding confidence in Credit Suisse. That led the Swiss regulator, Finma, to launch what became a near two-year investigation into its dealings with Greensill. The full resulting Finma report was never previously released. But key findings, released in February 2023, declared that Credit Suisse 'seriously breached its supervisory obligations' and would face additional oversight for senior managers and important business relationships. The 167-year-old bank collapsed a month later, leading to its emergency rescue by rival UBS. UBS is still trying to recoup money for former investors of the Greensill-backed Credit Suisse funds. Commenting on the Finma report, UBS said: 'This is a legacy Credit Suisse matter. The conduct described in the report pre-dates UBS's acquisition of Credit Suisse.' A representative for Lex Greensill declined to comment.
ABC News
5 days ago
- Business
- ABC News
GFG Alliance workers across Australia face an uncertain future as Sanjeev Gupta's financial woes worsen
Months after British industrialist Sanjeev Gupta was effectively stripped of ownership of his South Australian steelworks, hundreds of workers at his New South Wales coal mine remain stood down, and those at his Tasmanian smelter are about to be. The uncertainty is causing anger and frustration. "The future looks grim," said Jimmy Baker, who has worked at the Tahmoor coal mine in NSW for the past 20 years. "I hope we're back and cutting coal in no time at all. But the longer it drags on, that looks grimmer and grimmer." Mr Baker is one of 560 workers affected by the indefinite shutdown. While workers have been stood down with pay since February, he says he's feeling the financial strain after having to forego hundreds of dollars in bonuses. "People think we're sitting at home [and] we're rich … [but] we're on basic pay," he told 7.30. "By the time I pay the mortgage, child support, you're down to $60 some weeks. The prolonged shutdown has also taken a significant toll on Mr Baker's mental health. "My biggest fear going forward is being 52 and jobless ... what company is going to hire a 52-year-old?" he said. "I find myself walking around the house or walking inside to outside. There are days where I really do struggle." Sanjeev Gupta is struggling to keep his global empire afloat amid poor economic conditions and the collapse of his major financier, Greensill Capital, in 2021. His credibility has also taken a massive hit. In February, the South Australian government took the extraordinary step of placing Mr Gupta's Whyalla steelworks into administration because bills weren't being paid. Trade and other creditors were found to be owed more than $1 billion. The South Australian and federal governments have pledged $2.4 billion to help secure the steelworks' future. Bob Timbs from the NSW Mining and Energy Union told 7.30 the Tahmoor mine shutdown was only meant to last weeks, not months. "We were of the understanding that it was only going to take a couple of weeks for them to realise the further capital investment from prospective investors and that never occurred," Mr Timbs said. Mr Timbs said government intervention was needed. "The coal produced at Tahmoor is a high-grade coal used for steel production," he said. "It's widely used in Port Kembla and for export and it's completely necessary for us to have the likes of washing machines, clothes dryers, cars; anything that's made out of steel is made with coal. "We need to get it operating again. For that reason, I call on the state government to intervene and arrange a tripartite meeting between Mr Gupta, the department and myself and other stakeholders to clearly explain when he's going to start that operation back up." The NSW government is owed royalty payments and the mine is in arrears with its water bills, a similar situation to what was faced by the SA government. In a statement, NSW Natural Resources Minister Courtney Houssos said she had been monitoring the situation at Tahmoor closely and that it was in "everyone's best interests for GFG to quickly resolve their financing" and end the uncertainty. 7.30 understands Ms Houssos has written to Mr Gupta demanding to know the progress of refinancing and when the mine will reopen, after a previous assurance that operations would restart by May 24 wasn't met. A spokesperson for GFG Alliance said it was working hard to secure the "funding required for a resumption of normal operations at Tahmoor Colliery". It said the "complex process has taken longer than expected" but it would "continue to work towards finalisation of this funding" and was hopeful it would be completed soon. In Tasmania, Mr Gupta's Liberty Bell Bay manganese smelter will stop operations for at least four weeks from the middle of this month. Most of the 250 workers there won't be required and are expected to use their leave entitlements. The company is largely blaming ore supply challenges after a cyclone affected its main supplier, South32 GEMCO, in the Northern Territory last year. Ore shipments have since resumed. Independent MP Andrew Wilkie told 7.30 he was very concerned another of Mr Gupta's operations was facing problems. "So why isn't (GEMCO) shipping ore out to Tasmania, or — and I just floated this as a genuine question — is there doubt in the mine owner's mind about the future capacity of Liberty Bell Bay or GFG Alliance more broadly to pay its bills for that ore?" Mr Wilkie told 7.30. GFG's statement said Liberty Bell Bay had made a "declaration for ore with South 32 GEMCO for the remaining six months of the year" and was "now working through the contractual process". "We are continuing to work closely with the federal and Tasmanian governments through a joint taskforce as we deal with the residual impact of inventory and market challenges over the last several months," the statement said. Andrew Taylor worked at the manganese smelter for 43 years before retiring 18 months ago. He's worried about his former colleagues. "They're salt of the earth people. It's not right," Mr Taylor told 7.30. He said people were nervous given what they'd seen happen at Whyalla and Tahmoor. "It is extremely stressful for people in the community, extremely stressful." University of Sydney corporate law and insolvency professor Jason Harris told 7.30 that since the collapse of Greensill Capital, Mr Gupta's GFG Alliance has faced increasing difficulty securing finance. "He's having to turn to second, third and fourth tier lenders," Professor Harris said. The UK's Serious Fraud Office is investigating the relationship between GFG Alliance and Greensill Capital over suspicions of fraud, fraudulent trading and money laundering. GFG Alliance has denied any wrongdoing. "One of the features of Mr Gupta's global empire is that it is very opaque ... so lots of companies that have dealings with each other and often not a lot of independent, transparent reporting of financial results," Professor Harris said. "We're seeing multiple entities in different group structures in often very different businesses that are all experiencing significant financial distress at the same time. "It certainly seems to be a house of cards. Professor Harris said Australian authorities like ASIC should be asking questions. "At some point, I think we're entitled to ask, where were the gatekeepers here? Why weren't more questions asked?" he said. "Because the media has certainly been asking questions about the sustainability of Mr Gupta's empire for years and yet creditors keep lending him money, governments keep giving him handouts, and I think the public is entitled to ask why." A spokesman for ASIC said it was aware of the situation regarding the Whyalla Steelworks and GFG Alliance and was "continuing to monitor and evaluate the situation". Watch 7.30, Mondays to Thursdays 7:30pm on ABC iview and ABC TV Do you know more about this story? Get in touch with 7.30 here.
AU Financial Review
30-04-2025
- Business
- AU Financial Review
Lex Greensill hit with more legal troubles
London | Greensill Capital's administrator has filed a lawsuit against its founder Lex Greensill and six other former directors of the failed financial firm, adding to the legal challenges facing the Australian financier. Greensill Capital's main UK company, which collapsed into administration in March 2021 as part of a sprawling political and financial scandal, filed the lawsuit in London's High Court this week. Financial Times
