Mr Lex Greensill Takes Full Responsibility for Greensill Collapse
Financial News London reported that supply chain finance firm Greensill Capital founder Mr Lex Greensill, former Citigroup and Morgan Stanley banker,
Financial News London reported that supply chain finance firm Greensill Capital founder Mr Lex Greensill, former Citigroup and Morgan Stanley banker, apologised for the company's collapse and took full responsibility for its demise in front of British MPs. Mr Greensill told a UK’s Treasury Committee hearing on 11 May "I am desperately saddened that more than 1,000 very hardworking people have lost their job. I take full responsibility for any hardship being felt by our clients and their suppliers and investors in our programmes."
However Mr Greensill also pointed the finger of blame at a number of third parties, including German regulators and credit insurers, as well as the impact of the Covid-19 pandemic. Greensill said "It's deeply regrettable that we were let down by our leading insurer, whose actions assured Greensill's collapse. The ultimate failure of Greensill was for one reason. There are always associated reasons, but the reason that Greensill ultimately failed was because a material portion of our funding is provided by investors who require insurance together with the asset they purchase to protect them against the default of the underlying receivables."
Mr Greensill echoed this timeline in his hearing in front of MPs, saying that he was first became concerned about his firm in mid-December. He told "The first event that gave me concerns, though not for our company, I certainly had reservations and concerns about the state of the capital markets during March, April and May 2020. The capital markets at that time were roiled by the uncertainty of Covid. Although Greensill was funded by more than 50 banks and several dozen institutional investors, one didn’t know what was going to happen in the future. As it was we were able to support each of the supply chains and meet each of the suppliers’ requirements."
Fielding a round of intense questioning, the former banker was asked by Labour MP Mr Siobhain McDonagh if he is a fraudster. Mr Greensill responded "I am not.” The grilling by McDonagh continued "I've looked up the definition of fraud. It's an act or an incidence of deception...it seems to me that this is precisely what your financial model of prospective receivables is – nothing more than a trick." Mr Greensill fought back, responding "The business that we undertook was properly described. All of our investors understood exactly what it was that they were purchasing. In any investment, there is risk."