Steel magnate Sanjeev Gupta is now facing the heat over the collapse of the supply chain finance firm Greensill Capital, as his GFG Alliance was one of its biggest customers.
Greensill’s administrators Grant Thronton have warned they could try to seize assets from Gupta to recover £472 million in unpaid funds, The Telegraph reports.
Greensill used to advance cash to companies so they could pay suppliers early.
GFG Alliance, a collection of companies headed by Gupta, reportedly owed £3.7 billion to Greensill when the London-headquartered lender wound up its operations in 2021.
This includes $587m owed to the UK arm of Greensill Capital, which is yet to be repaid despite long-running negotiations, according to Grant Thornton.
If the talks fail, Greensill’s administrators may explore available recovery options under security and guarantees given by GFG for various loans.
The administrators claimed that non-binding agreements had been signed with Gupta and various GFG entities since 2022 but no debt repayments had been made as of March 7.
Another agreement regarding debt repayments was struck on March 15 this year.
GFG claims the amount owed by Gupta’s companies remains in dispute.
A company spokesman refused to confirm the new deadline for GFG’s debt repayments.
Greensill filed for insolvency in 2021 due to ballooning debt and Credit Suisse deciding to suspend £7bn of funds.
The company’s close relationship with Gupta’s empire has come under scrutiny amid reports it lent money to GFG companies based on speculative invoices from customers they had never done business with.
