Serious Fraud Office continues investigation into Hartlepool steel company owner
Plus: This week at TVCA + where's Ben?
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The Serious Fraud Office continues its investigation into the owner of Liberty Steel in Hartlepool, as the South Australian Government takes control of its owner’s Whyalla steelworks.
Earlier this month the South Australian Government forced Whyalla steelworks, which is owned by GFG Alliance, which also owns Liberty Steel in Hartlepool, into administration because of the state of its finances.
The federal government has promised more than $2bn (AUD) to save the plant which directly employs over 1,000 people and produces a majority of Australian steel.
Creditors for the steelworks, it was reported on Friday, are collectively owed $1bn (AUD). Internal correspondence from GFG in Australia, seen by The Teesside Lead, shows GFG claims to be the largest creditor to the steelworks, and could stand to be repaid $500m (AUD) as a result of going into administration.
GFG, owned by Indian-born British businessman Sanjeev Gupta, has been in choppy waters since the collapse of its main financers, Greensill Capital, in 2021.
Liberty secured new financing last year as its Hartlepool plant, which manufactures steel pipes, secured the contract to provide the pipes to be used in Net Zero Teesside’s carbon capture infrastructure.
A spokesperson for GFG told The Teesside Lead: “Developments in Whyalla do not impact our other businesses in the rest of the world, including the UK.”
However, the Serious Fraud Office in the UK raided GFG in 2022 as part of an investigation into Greensill Capital.
The auditor for Speciality Steel UK Ltd, Liberty’s sister company in South Yorkshire also owned by Gupta, resigned in 2022 citing insufficient information from the company in relation to that investigation. They proposed to submit disclaimed accounts, which Mr Gupta refused, leading to their resignation. Its accounts for 2019/20 remain un-audited and unpublished.
Liberty Steel Limited’s accounts for 2019/20 are published, but they’re the last period to have been submitted.
I asked the SFO for an update this week, and their spokesperson told me: “We are investigating suspected fraud, fraudulent trading and money laundering within the GFG Alliance, which includes examining its financing arrangements with Greensill Capital.”
The collapse of Greensill and GFG’s enormous debts - it owes £472m to Greensill’s administrators - are mutual financial disasters. Greensill had exposed itself by lending roughly £5bn to GFG, and GFG was entirely dependent on funding from Greensill.
UK taxpayers are thought to be exposed to more than £1bn of debt from Greensill’s collapse through three different Government schemes which allowed the financial upstart to provide hundreds of millions of pounds to companies linked to GFG.
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This week at TVCA…
I was absolutely astonished to receive an FOI response from TVCA a few days ago which arrived only a week after I had submitted it.
It doesn’t feel like that long ago that literally every FOI I sent was sent back at 7pm on the statutory deadline.
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