BEIS Hearing to Examine GFG Alliance & Liberty Steel Relationship
British Parliament’s Business, Energy and Industrial Strategy Committee will continue its inquiry on 29 June from 10 AM into Liberty Steel & the future of steel industry in UK with an evidence session focussing on the financial relationships between GFG Alliance entities and the financial practices which contributed to Liberty Steel’s current difficulties. The evidence session will examine concerns around GFG Alliance’s financial agreements in order to assess how financial difficulties within GFG and Liberty Steel occurred and were regulated, as well as how much public money was received by the group. The hearing will feature witnesses from King and King, Wyelands Bank and the British Business Bank and will likely focus on the audit and regulation of GFG accounts, the funding of GFG companies and Liberty Steel sites, and GFG’s use of the Coronavirus lending scheme.
Mr Stephen Rose, Chief Executive Officer, Wyelands Bank
Mr Milan Patel, Partner, King & King
Mr Patrick Magee, Chief Commercial Officer, British Business Bank
Business, Energy and Industrial Strategy Committee said “Mr Lex Greensill has been in contact to indicate he would be willing to engage with the Committee’s inquiry but would not be available for the evidence session on 29th June. The Committee will continue to engage with Mr Greensill in order to seek responses to its questions relating to a number of issues for its current inquiry into Liberty Steel & the future of the steel industry.”
The Committee has so far heard from the Secretary of State and witnesses from Tata Steel and Liberty Steel to examine steel industry pressures and financial practices.
Business, Energy and Industrial Strategy Committee is holding an inquiry into Liberty Steel and the Future of the UK Steel Industry. On 8 March 2021, the supply chain finance firm Greensill Capital collapsed into administration after months of speculation about its financial viability. Greensill was the principal financial backer of GFG Alliance, owner of Liberty Steel, which is the third largest steel manufacturer in the UK. The collapse of Greensill puts 5,000 jobs at risk at Liberty Steel and other firms. UK taxpayers are reported to be exposed to more than GBP 1 billion of debt from the collapse of Greensill via three Government guarantees, including a state-backed coronavirus lending scheme, which enabled Greensill to advance hundreds of millions of pounds to companies linked to GFG Alliance. On 28 March 2021, the Government rejected a request for GBP 170 million in financial support from Mr Gupta for Liberty Steel due to concerns over GFG Alliance's opaque accounting procedures. This raises questions about the effectiveness of auditing and corporate governance regulations, and about the risks posed to UK industry by high-risk financing methods.