Mr Gupta Enlists a Barrage of Lawyers to Defend Business
Financial Mail reported on Sunday that Mr Sanjeev Gupta has drafted in a barrage of lawyers to defend his steel empire as a crisis at its biggest lender
Financial Mail reported on Sunday that Mr Sanjeev Gupta has drafted in a barrage of lawyers to defend his steel empire as a crisis at its biggest lender threatens to engulf him. Mr Gupta, who last week admitted that he owes billions, has delivered a pugilistic response, saying from his home in Dubai “We have our legal defences ready. There is a barrage of lawyers who are readying up all their guns to fight this off. Lenders risked hurting their own interests by calling in loans before the financing was complete. Damaging the business is not in the interest of anybody, especially not the lenders. What they are doing is not logical and the arguments were made to them very robustly that they are damaging their own stakeholders, their own recovery prospects.'
Supply chain finance firm Greensill fell into administration last month. Mr Gupta has been scrambling to refinance the billions Liberty Steel owed Greensill.
Credit Suisse, the Swiss bank that provided USD 10 billion in funding to Greensill, has petitioned a winding-up order on GFG's commodities trading business Liberty Commodities last week. Citigroup, acting on behalf of Credit Suisse, began the action in London's insolvency court to recoup unpaid debts from Mr Gupta's GFG Alliance. Lenders such as Credit Suisse can apply to a court and ask it to close a company that owes them money. To be successful, it has to show that the company cannot pay what it owes.
Liberty Commodities is one of the main units of Mr Gupta’s metals trading arm and specialises in trading non-ferrous metals and steel. It had revenues of USD 4.2 billion in the year to March 2020 and 13 employees. Before venturing into metals manufacturing, Mr Gupta made his first fortune from commodities trading.
There are worries similar action could be taken against other companies owned by Mr Gupta. Industry sources believe three or four companies have been targeted with court action and that an application to wind up Liberty’s Specialty Steel division in Rotherham could be next.