GFG Alliance

Last updated
GFG Alliance
IndustryMining, energy, materials
Revenue$20 billion (2020) [1]
OwnersVarious members of the Gupta family
Number of employees
Over 35,000 (2019)
Subsidiaries
Website www.gfgalliance.com

Gupta Family Group Alliance (GFG Alliance) is an international group of businesses associated with businessman Sanjeev Gupta and the British Gupta family. [2] [3] Collectively, companies in the alliance are involved in mining, industry and trading.

Contents

History

In March 2021, GFG Alliance was struggling to secure new financing after the collapse of one of its lenders, Greensill Capital. [4] GFG was put under brief observation by the German financial regulator BaFin for their business with Greensill. [5]

On 31 March Credit Suisse began insolvency proceedings against Liberty Commodities Limited, a GFG subsidiary, at a London court. The action was brought by another bank, Citigroup, which was acting under instruction from Credit Suisse. It related to Credit Suisse's supply-chain investment funds, worth nearly $10 billion, whose funds were party invested through Greensill Capital, which had placed $3.6 billion in GFG, part of which had funnelled down to LCL. It was expected for the balance sheet of Credit Suisse to absorb significant damage as a result. [6] The bank also launched insolvency proceedings against other entities affiliated with GFG. [7] According to The Wall Street Journal , Credit Suisse would face difficulties in recouping the funds, as Greensill had split up loans backing the funds' investments (including loans granted to GFG Alliance) into a double trust structure. [8]

On 3 April 2021, it came to light that the Jahama Highland Estates (formerly the "Alcan Estate") had been purchased in 2016 as part of the Rio Tinto Mines deal for the Lochaber aluminium plant, because the furnace requires so much power that the smelter is located near a hydroelectric plant, which drains the basin of the 114,000 acre Estate. Alcan designed all their smelters that way. The Estate includes the north face of Ben Nevis. According to reports, the Scottish National Party mandated that the Estate never be split from the hydro plant and aluminium smelter but Gupta ignored them and placed ownership of the Estate in a company that is domiciled on the Isle of Man. The 2016 deal was worth £330 million and was guaranteed by the UK Chancellor of the Exchequer. Conservative finance spokesperson Murdo Fraser was critical about the alleged breach of the SNP agreement and urged the SNP to "take whatever steps are necessary to protect public funds". [9]

In May 2021 investors began to pay more attention to the sale of GFG Alliance's French steel plants Ascoval and Hayange causing GFG Alliance to hire Rothschild to run an accelerated M&A process of the two assets. [10]

In May 2022, the Serious Fraud Office (SFO) announced they were launching a criminal investigation into GFG for suspected fraud linked to the collapse of its main lender Greensill Capital in 2021. [11] This is ongoing. [12]

GFG Alliance was Greensill’s biggest client and it was reported at the time of the collapse that it had an exposure totalling $5bn. [13] In April 2024, Grant Thornton, the administrators for Greensill, published a report where they revealed that they were still owed round $587.2m (£472m) from the GFG Alliance. [14]

Structure

The GFG Alliance includes: [15]

Miscellaneous divisions

Lobbying

GFG Alliance's interests are represented to the South Australian parliament by lobbying firm, Bespoke Approach. [17]

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References

  1. ↑ "Champions of Sustainable Industry" (PDF). GFG Alliance. Retrieved 31 May 2021.
  2. ↑ Stress Reliever- Business News
  3. ↑ Sanjeev | GFG Alliance
  4. ↑ Pickard, Jim (2021-03-19). "UK draws up plans to run Liberty Steel if Gupta's GFG collapses". Financial Times. Retrieved 2021-04-02.
  5. ↑ "Greensill Woes Deepen as Germany Shutters Bank Unit". Bloomberg.com. 2021-03-03. Retrieved 2021-04-02.
  6. ↑ Makortoff, Kalyeena (31 March 2021). "Credit Suisse aims at wind-up orders for Gupta's Liberty arm". Guardian News & Media Limited.
  7. ↑ "Subscribe to a slice of the FT | Financial Times". www.ft.com. Retrieved 2021-04-08.
  8. ↑ "Credit Suisse Effort to Recoup Greensill Loans Faces Roadblock". Dow Jones & Company, Inc. The Wall Street Journal. 1 April 2021.
  9. ↑ Gill, Oliver; Millard, Rachel (3 April 2021). "Gupta acquired Scottish hunting estate in taxpayer-backed deal with SNP". Telegraph Media Group Limited.
  10. ↑ Gibson, Lara; Ross, Andrew (13 May 2021). "Investors Circle Sale of GFG Alliance French Assets Ascoval, Hayange; Rothschild Running Accelerated M&A". Reorg.
  11. ↑ Simpson, Jack (2024-10-10). "Sanjeev Gupta prosecuted for failing to file accounts for more than 70 companies". The Guardian. ISSN   0261-3077 . Retrieved 2024-11-11.
  12. ↑ "Gupta Family Group Alliance (GFG)". Serious Fraud Office. Retrieved 2024-11-11.
  13. ↑ "Bloomberg - Are you a robot?". www.bloomberg.com. Retrieved 2024-11-11.{{cite web}}: Cite uses generic title (help)
  14. ↑ Ward-Brennan, Maria (2024-04-17). "Sanjeev Gupta's GFG Alliance still owes Greensill Capital nearly £500m". City AM. Retrieved 2024-11-11.
  15. ↑ "GFG Alliance - an international alliance of businesses". GFG Alliance. Retrieved 11 December 2018.
  16. 1 2 Nelson, Eshe; Ewing, Jack; Alderman, Liz (2021-03-28). "The Swift Collapse of a Company Built on Debt". The New York Times. Retrieved 2021-03-31.
  17. ↑ "Lobbyist Portal". www.lobbyists.sa.gov.au. Retrieved 2021-06-14.
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