GFG Alliance Denies Wrongdoings in Covid Loans
BBC reported that GFG Alliance, while responding to an article in the Financial Times, said it that is confident it acted legally when applying for funds under
BBC reported that GFG Alliance, while responding to an article in the Financial Times, said it that is confident it acted legally when applying for funds under the UK government's Covid support schemes. GFG Alliance said that it applied for loans to support business activities and preserve jobs in industrial communities in the wake of the Covid pandemic. It said that the company sought approval from authorities and worked with unnamed lawyers on the applications, and was also subject to checks by Greensill’s lawyers and 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. GFG Alliance also emphasised that although several of its UK businesses had applied for loans backed by the CBIL scheme, only one of them had received any funds, a total of GBP 45.6 million.
Financial Times report had said that GFG Alliance's main lender, the now collapsed Greensill Capital, was authorised to provide a maximum of GBP 50 million to a single company under the Coronavirus Large Business Interruption Loan Scheme. Citing internal documents, the Financial Times claimed Mr Gupta set up new corporate entities in the UK, with the sole purpose of securing more government loans.
The Coronavirus Large Business Interruption Loan Scheme was run by the British Business Bank, which accredited private-sector lenders, including the UK’s largest banks and Greensill. The British Business Bank, however, launched an investigation into Greensill and its loans to Gupta before its collapse. The British Business Bank told BBC that Greensill Capital was approved to provide funding through the CLBIL scheme last year and all accredited lenders were subject to audit by the bank to ensure they complied with the rules. If serious non-compliance were to be found, the British Business Bank added, it was entitled to take remedial action, including the withdrawal of loan guarantees. However, it emphasised it would not be appropriate to comment further in Greensill's case, given there is an ongoing investigation.