Home Business Steel tycoon Gupta wins reprieve over Greensill winding-up petitions

Steel tycoon Gupta wins reprieve over Greensill winding-up petitions

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Legal efforts to force Sanjeev Gupta’s Liberty Steel operations in the UK into insolvency have been aborted more than two years after they were launched, Sky News understands.
City editor
Monday 26 June 2023 13:04, UK
The steel tycoon Sanjeev Gupta has won a partial reprieve over attempts to force his British operations into insolvency after two winding-up petitions against them were dropped.
Sky News has learnt that long-running legal claims against parts of Mr Gupta’s Liberty Steel empire in the UK, which employs thousands of people, were withdrawn last week.
Originally filed in March 2021, the petitions sought to force Liberty’s Speciality Steel arm and a division formally known as Liberty MDR Treasury Company into insolvency.
The case is understood to have been adjourned on several previous occasions following requests from Mr Gupta’s lawyers, although the circumstances behind the petitions’ withdrawal were unclear on Monday.
One source suggested that Liberty may have succeeded in persuading the applicants that they were more likely to see money returned to them if they provided more breathing space than if the steelmaker’s operations were forced into insolvency at this juncture.
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The collapse of Greensill Capital and associated entities in 2021 became one of the most notorious corporate failures in recent UK corporate history.
Its demise, and the reputational battering which ensued for founder Lex Greensill and the former prime minister David Cameron, who advised the company, continues to reverberate.
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The winding-up applications name Citigroup as the petitioner, with the US bank acting on behalf of a group of Greensill fund investors, including Credit Suisse.
In May 2022, the Financial Times reported that Credit Suisse’s negotiating team had become frustrated at the repeated delays to the case and was pressing for it to proceed through the legal system.
Previous reports have said that the creditors are owed more than $1bn by Mr Gupta’s businesses.
GFG Alliance, which houses Liberty Steel, continues to face a number of other legal claims from creditors which, if successful, could have significant consequences for Mr Gupta’s multinational group.
The tycoon has been embroiled in a separate battle with administrators to Aartee, a steel stockholding business which collapsed several months ago.
He also faces the outcome of a Serious Fraud Office probe into his operations, which was launched in May 2021.
Eleven months later, SFO investigators visited various Liberty business premises as part of what the agency said represented a „stepping up” of its investigation.
It is unclear whether any charging decisions are anticipated in the near term.
Along with larger competitors Tata Steel UK and British Steel, which is owned by China’s Jingye Group, Liberty Steel has faced a torrid environment for steelmakers in recent years.
The government has been in talks to provide separate packages of financial support worth £300m for the two biggest players in the industry, but had not extended a similar offer to Mr Gupta.
In 2021, he wrote to ministers seeking a £170m taxpayer bailout for Liberty Steel UK, but was turned down amid concerns about the opacity of its finances.
Liberty Steel has operations at multiple sites across the UK, including the country’s biggest electric arc furnace in Rotherham, south Yorkshire.
A Liberty Steel spokesman declined to comment on Monday.
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