Companies affiliated with Gupta applied for hundreds of millions of pounds of loans via Greensill Capital, which tapped the Coronavirus Large Business Interruption Loan Scheme (CLBILS). The government set up the programme at the height of the pandemic to help companies weather the crisis.
The collapse last month of Greensill, Gupta’s main lender, has left his GFG Alliance, which employs 35,000 people at metalworks stretching from Wales to Australia, battling for survival.
While Greensill was only authorised to provide £50m to a single company via the emergency loan programme, GFG is not a consolidated legal entity, but a loose collection of businesses owned by Gupta’s family.
New documents seen by the FT show that Gupta incorporated new entities last year to further split up his empire, with the sole purpose of securing more taxpayer-backed loans through Greensill.
GFG outlined the new structure in a document produced last year titled “CLBIL Restructuring”, making explicit that the reorganisation was intended to capitalise on the programme.
The revelation comes after Chancellor Rishi Sunak last week confirmed that the government’s guarantees on the Greensill loans have been suspended while the British Business Bank, which administered the scheme, investigates Greensill’s compliance with its terms.
The body launched the investigation in October after the FT first revealed that multiple companies linked to Gupta were drawing CLBILS loans.
Separate Singaporean public filings show that in August and September 2020, the industrialist incorporated four new Singaporean holding companies — LRC One, Liberty Steel Newport Holdings, LPH Holdings and Liberty Commodities Holdings — to split up the ownership of several of his British industrial and commodities trading businesses.
Ownership of a fifth holding company, called CMB Restructuring, was transferred from Liberty Steel Group to Gupta directly in September, in order to facilitate another loan, according to the documents reviewed by the FT.
GFG told the FT that while several of its UK entities applied for CLBILS loans, only one of these companies received £45.6m under the scheme.
“GFG Alliance sought approval from relevant authorities and worked with multiple legal parties, prior to finalising any loan applications to its lender,” Gupta’s company said. “GFG Alliance is confident that it abided by all rules that applied to GFG Alliance entities in respect to those loan applications, including rules related to business structure.”
Greensill and its administrator Grant Thornton declined to comment.
Companies owned by Gupta’s family members and associates also borrowed money under the scheme, including a commodities trading firm legally owned by his 77-year-old father. Another beneficiary was AarTee Commodities, owned by his business associate Ravi Trehan.
Singaporean filings show that Trehan formerly owned a minority stake in Gupta’s Liberty Commodities business. The 62-year-old businessman also attended a lobbying dinner Gupta hosted with members of the Scottish government, in his capacity as GFG’s “strategic board member”.
“We have a business relationship with companies within the GFG Alliance, both as suppliers and customers of goods and services,” AarTee said in a statement. But we are “a separate independent business guided by its own strategy and pursuing its own success. As you state, in the past, we held a small stake in Liberty, and it was divested.”
The British Business Bank has repeatedly refused to disclose any information on the amount of funding that Gupta and his associates applied for through the scheme.
Last month the body rejected a Freedom of Information request concerning Greensill, saying the publication of this information would be “prejudicial to the competitive interests of Greensill Capital”.
The British Business Bank confirmed to the FT that it can withdraw guarantees under the scheme if “serious non-compliance is identified”, but said that it would “not be appropriate to comment further in Greensill’s case given there is an ongoing investigation”.
Greensill made the CLBILS loans through its banking subsidiary in Germany, whose management is now under criminal investigation following a complaint from regulators.