Greensill Funded GFG Alliance GBP 400 Million under CLBIS
The Times reported that Mr Sanjeev Gupta and financier Mr Lex Greensill exploited a Covid-19 state guarantee scheme for struggling companies to
The Times reported that Mr Sanjeev Gupta and financier Mr Lex Greensill exploited a Covid-19 state guarantee scheme for struggling companies to extract GBP 400 million of taxpayer backed loans. As per report “Greensill is understood to have used supplier finance to hand eight state backed loans of GBP 50 million each to Gupta’s GFG Alliance and companies linked to him.”
But the Government's British Business Bank, which oversees CLBILS, withdrew the guarantee after concluding that Greensill broke the scheme's rules three weeks ago.
Under the Coronavirus Large Business Interruption Loan Scheme, firms are allowed to borrow up to GBP 50 million, with 80% of the loan guaranteed by the government. Under the bank’s rules, some firms can borrow up to GP 200 million, but only if such a move has been preapproved.
The CLBILs scheme is not the first time Mr Gupta has used government guarantees to fund his business. In 2016, he got a 25-year, GBP 575 million guarantees from the Scottish government for a Highlands aluminium smelter and hydro-electric plant.