Sanjeev Gupta’s Liberty Steel in UK loan breach: Report

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New Delhi, May 23 (IANS) Sanjeev Guptas Liberty Steel is in a loan breach of 18 million pounds with Metro Bank.

The BBC reported that Metro Bank asked for early repayment of an £18m loan from the troubled steel group Liberty more than two years ago – and it is still waiting for its money.

The report said this revelation is another example of the financial pressures weighing on Liberty’s owner GFG Alliance. The group’s future has been in doubt since its main backer, Greensill Capital, went into administration in March. GFG says “no loan terms have been breached for non-payment”.

The report said while politicians welcomed Gupta dubbed ‘the saviour of steel’, there were always questions about where the money came from to keep open ageing factories that others had not been able to run profitably. This came to a head in May when the UK Serious Fraud Office announced an investigation into GFG, the Gupta family’s group of businesses, looking into alleged money laundering and fraudulent trading.

GFG has said it will co-operate fully with the investigation.

However, problems had arisen with a loan secured on the Newport steelworks as early as 2018, an analysis of Land Registry documents and filings for companies linked to GFG has shown.

Valued at £21m, the steelworks is owned by a UK company, Liberty Steel Property Newport Ltd (LSPN), controlled by Sanjeev Gupta.

Since the Greensill collapse, those pressures have intensified. One investor, Credit Suisse, has begun proceedings to wind up GFG Alliance for money it is owed and Tata is reportedly suing Liberty Steel over unpaid debts.

GFG requested a £170m bailout from the UK government, which it rejected, BBC said.

Writing in Nikkei Asia, Lionel Barber said, “The would-be savior sounds more like the Pied Piper of Dubai, a trickster who has led many investors, governments and workers astray”.

Barber said far from being the feisty upstart, Gupta was born into an Indian business dynasty, growing up in the Punjabi city of Ludhiana, where his grandfather owned steel mills and his father, PK, built a business making Victor bicycles.

In the past six years, Gupta’s lifestyle turned ever more extravagant. He took ownership of a sprawling Welsh countryside estate, a colonial mansion in Sydney, and 114,000 acres (461 sq. km) in the Scottish Highlands, including the foothills of Ben Nevis, the highest mountain in the British Isles. Even as the financial foundations of his empire crumbled last year, he bought — in his wife’s name — a six-story mansion in London’s Belgravia, a coveted location, for the sum of 42 million pounds ($60 million), Barber said.

How Gupta was able to finance these trophy assets remains unclear. His steel business certainly enjoyed a close relationship with Greensill whose backers included SoftBank and General Atlantic, the U.S.-based venture capital fund, he added.