Greensill Capital Limited has published information, that Grant Thornton UK LLP had become joint administrators in the firm. It looks like yet another disruption bringing losses for the parties involved in Greensill’s endeavors. Among them - Credit Suisse.
But to understand why all of a sudden, UK taxpayers are now exposed to the debt of £1 billion from Gupta and Greensill, we’ll need to have a closer look at two personalities - Sanjeev Gupta and Lex Greensill.
Fall from grace - Lex Greensill
Greensill is surprisingly ‘anonymous’ on the web, and it looks as if a huge chunk of information about him has been wiped out. Even his profile on Greensill’s site has been removed.
He was born in Australia, then moved to the United Kingdom, where he worked for Citigroup and Morgan Stanley. He was successful, as he played a role in building Trade Finance EMEA at Citi. He was even awarded a CBA by the Royal Family.
His firm stood strong amid the Covid-19 crisis, as it employed almost 1000 people back in December, and had a funding of $163 billion provided. They were already reaching Latin American and German markets, with things looking pretty great. But the cracks in this ‘perfect’ machine started to appear.
Sanjeev Gupta - the steel magnate
Gentlemen worked almost as a duo, but recently it has become public, that German regulators - BaFin started to push Greensill in order to reduce its exposure to firms within Gupta’s influences.
Greensill Capital opened the first Gupta’s fund in 2017, and their relationship seemed to be almost perfect. Gupta, GFG Alliance’s Executive Chairman, has been involved in the steel business for a few years now, with a lot of successes.
The Greensill’s exposure to GFG is currently valued at $5 billion, and as regulators and some experts claim it to be too much, Greensill and Gupta clearly do not. To follow the story, brilliantly described by Disruption Banking, read their piece by Andy Samu: https://disruptionbanking.com/2021/03/15/how-much-disruption-has-lex-greensill-caused-credit-suisse/
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