Sanjeev Gupta thanked the minister for his key role in securing loans for Greensill | Greenery
Sanjeev Gupta thanked Conservative Minister Nadhim Zahawi for his “personally instrumental” role in enabling Greensill Capital to provide taxpayer-backed Covid business support loans, in a letter released by the government.
Greensill collapsed last year, sparking a lobbying scandal involving former Prime Minister David Cameron and a Serious Fraud Office investigation into more than £300million in loans to companies linked to GFG Alliance, the conglomerate metals led by Gupta, under the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Last year, the National Audit Office said the state-owned British Business Bank, which has now suspended government guarantees securing the loans, gave Greensill Capital access to the scheme without subjecting the company to detailed checks, leaving taxpayers with a loss of £335m.
It emerged that in October 2020, Gupta sent a letter to Zahawi, then Minister of Business Department (BEIS), thanking him for getting the bank to approve Greensill’s access to the loan scheme.
“As you were personally instrumental in securing BBB approval for Greensill Capital to provide financial assistance under the CLBILS scheme, it would be very appropriate if you could join us in marking this moment. relief to thousands of workers,” Gupta said in the letter, published after a freedom of information request filed by the Financial Times.
In the letter, Gupta went so far as to invite Zahawi, who was promoted to education secretary in the autumn, to a “small gathering” at his steelworks in Rotherham to mark the success of the Greensill loan.
The letter was sent days before the launch of a formal investigation into Greensill and GFG-linked business lending.
“The department does not acknowledge the assertion made in Mr. Gupta’s letter that Nadhim Zahawi played a role in obtaining the bank’s approval to accredit Greensill Capital,” BEIS said. GFG declined to comment.
BEIS said Zahawi “did not respond to the letter, nor did he make any subsequent visit to any GFG Alliance site.”
The FoI also revealed that “an exchange of text message or phone call between Sanjeev Gupta and Nadhim Zahawi took place on an unknown date” in relation to “Covid assistance”, according to the FT.
In the FoI response, BEIS revealed that there “was no longer an electronic record of the communication stored on the device used by Nadhim Zahawi, which was his personal cell phone.”
However, according to “information held on communication” to BEIS, the minister explained to the steel baron that “requests should be directed to BEIS officials”, the FT said.
A Zahawi spokesperson said the decision to accredit Greensill was made independently by the British Business Bank. “The government was not involved in the decision to accredit Greensill,” he said. “The decision was made independently by the British Business Bank, in accordance with its normal procedures.”
The spokesman said GFG’s request for assistance was passed to Zahawi by his local Labor MP, and Zahawi told Gupta that requests should be directed to department officials.
“The claim that Nadhim was instrumental in getting the approval is little more than flattery from GFG in a squashed letter from their PR team,” the doorman said. -word. “He did not respond to the letter or attend the event.”
Greensill Capital specialized in supply chain finance, where companies borrow money to pay their suppliers, but collapsed last March after losing insurance cover for loans made to his clients.
It emerged that former Prime Minister Cameron had sent 62 text messages to former colleagues begging for help, while earning millions of pounds as an adviser to Greensill. He had also previously lobbied ministers and officials across government to allow Greensill to provide Covid loans.
Intensive SMS lobbying of ministers and senior civil servants on behalf of Greensill Capital showed a “significant lack of judgement”, an official parliamentary inquiry has found.
The Treasury select committee said it was inappropriate for the ex-prime minister to send 62 messages to former colleagues pleading with them to help the bank, in which Cameron held a “very significant personal economic interest”.
Cameron has earned millions of pounds as an adviser to the board of Greensill, the lending startup founded by Australian banker Lex Greensill. Last year, Cameron leaked a series of text messages pressuring ministers and officials across government to give his employer permission to provide Covid loans.
A parliamentary inquiry found Cameron showed a “significant lack of judgment” but did not break lobbying rules. He said: “It reflects the insufficient strength of the rules.”
In June 2020, Cameron texted Zahawi: “Lex Greensill…says you’re helpful for the HMT and CBILS program,” according to the former prime minister’s statements to the Treasury select committee, which did not include a statement. Zahawi’s answer.
GFG has previously denied any wrongdoing and said it would cooperate with the SFO’s investigation.