The crisis at the troubled lender Greensill Capital has spread further after German regulators banned its German subsidiary Greensill Bank from doing business and reportedly filed a criminal complaint against management and Bank of England took action against one of the firm’s major business partners. German Federal Financial Supervisory Authority Bundesanstalt für Finanzdienstleistungsaufsicht has issued a ban for Greensill Bank AG on disposals and payments as there is an imminent risk that the bank will become over-indebted. In addition, BaFin has ordered that the bank be closed for business with customers and prohibited it from accepting payments that are not intended for repaying debt to Greensill Bank AG. BaFin’s measures are immediately enforceable but not yet final. Greensill Bank AG is directly supervised by BaFin. During a special forensic audit, BaFin found that Greensill Bank AG was unable to provide evidence of the existence of receivables in its balance sheet that it had purchased from the GFG Alliance Group. For this reason, BaFin has already taken extensive measures to secure the bank’s liquidity and to limit risks for Greensill Bank AG and has appointed a special representative for the bank. Furthermore, the Greensill Bank was reported by Bafin to the public prosecutor's office in Bremen on suspicion of balance sheet manipulation. Balance sheet manipulation can be punished with up to three years in jail under German law. Further questions are raised about GFG Alliance Group’s finances when the Bank of England ordered its subsidiary, GFG Alliance, to inject about GBP 75 million into Wyelands Bank, established in 2016 by Mr Sanjeev Gupta. Wyelands will use the money to return cash to retail savings customers as part of a plan it is agreeing with regulators. Wyelands Bank said “It will close its deposit accounts by 24th March and will be returning funds to its depositors. This is a result of regulatory requirements applied by the PRA to Wyelands Bank. The Bank has been working closely with its regulators regarding this repayment to depositors. The Bank is solvent and has sufficient financial resources to meet all of its obligations and repay all depositors.” Greensill was thrown into crisis earlier this week after it failed to secure a court injunction in Australia that would prevent insurers from pulling coverage for loans extended to its business borrowers. Its lawyers said the lapsed contracts would leave the firm unable to offer new loans to businesses, which may otherwise default and be forced to file for insolvency, putting 50,000 jobs around the world at risk. Credit Suisse later blocked investors from withdrawing money from USD 10 billion of funds linked to Greensill. The Swiss asset manager GAM Holdings revealed it was also closing its USD 842 million Greensill supply chain finance fund owing to market developments and resulting media coverage. Greensill is now holding out hope for a pre-pack deal with the private equity group Apollo Global Management, which is expected to cherrypick the best assets out of administration. However, Apollo is not expected to pick up a tranche of loans extended to Gupta, whose GFG Alliance empire has relied heavily on Greensill loans. The lender was founded in 1927 in Bremen as Nordfinanz Bank AG and renamed Greensill Bank AG in 2014, when it was acquired by Greensill Capital. GFG Alliance’s Mr Sanjeev Gupta has a close relationship with Australian banker Mr Lex Greensill, who founded the finance company. Greensill Bank AG describes itself as a refinancing institution for the Greensill Group and an investor in working capital solutions products developed by its British sister company Greensill Capital (UK) Ltd. The Greensill Group primarily acts as a global provider of short term supply chain financing solutions for industrial companies. The Australian company Greensill Capital Pty Ltd is the parent company of Greensill Bank AG.