Sanjeev Gupta thanked the Tory minister Nadhim Zahawi for his “personally instrumental” function in enabling Greensill Capital to make taxpayer-backed Covid enterprise help loans, in a letter launched by the federal government.
Greensill collapsed final yr, sparking a lobbying scandal involving the previous prime minister David Cameron and a Critical Fraud Workplace (SFO) investigation into greater than £300m of loans to companies linked to GFG Alliance, the metals conglomerate run by Gupta, underneath the Coronavirus Massive Enterprise Interruption Loans Scheme (CLBILS).
Final yr the Nationwide Audit Workplace stated the government-owned British Enterprise Financial institution (BBB), which has now suspended authorities ensures backing the loans, gave Greensill Capital entry to the scheme with out subjecting the agency to detailed checks, leaving taxpayers going through a £335m loss.
It has emerged that in October 2020 Gupta despatched a letter to Zahawi, then a minister within the enterprise division (BEIS), thanking him for getting the financial institution to approve Greensill’s entry to the mortgage scheme.
“Because you had been personally instrumental in getting the BBB’s approval for Greensill Capital to supply monetary help underneath the CLBILS programme, it will be very becoming should you might be a part of us to mark this particular second that gives reduction to 1000’s of employees,” stated Gupta within the letter, launched following a freedom of knowledge request lodged by the Monetary Occasions.
Within the letter, Gupta went so far as inviting Zahawi, who was promoted to schooling secretary within the autumn, to a “small gathering” at his steelworks in Rotherham to mark the Greensill mortgage success.
The letter was despatched days earlier than a proper investigation into Greensill and the loans to GFG-linked corporations was launched.
“The division doesn’t recognise the assertion made in Mr Gupta’s letter that Nadhim Zahawi performed a job in securing the financial institution’s approval to accredit Greensill Capital,” stated BEIS. GFG declined to remark.
BEIS said that Zahawi “didn’t reply to the letter, nor did he make any subsequent go to to a GFG Alliance web site”.
The FoI additionally revealed that “a textual content alternate or cellphone name between Sanjeev Gupta and Nadhim Zahawi passed off at an unknown date” in relation to “Covid help”, in accordance with the FT.
Within the FoI response, BEIS disclosed that there “was not an digital document of the communication saved on the machine utilized by Nadhim Zahawi, which was his private cell phone”.
Nonetheless, in accordance with “data held concerning the communication” at BEIS, the minister defined to the metal baron that “requests would should be directed by means of BEIS officers”, stated the FT.
A spokesperson for Zahawi stated the choice to accredit Greensill was taken independently by the British Enterprise Financial institution. “The federal government was not concerned within the resolution to accredit Greensill,” he stated. “The choice was taken independently by the British Enterprise Financial institution, in accordance with their standard procedures.”
The spokesperson stated GFG’s request for help was referred to Zahawi by its native Labour MP, and Zahawi advised Gupta that requests would should be directed by means of division officers.
“The declare that Nadhim was instrumental in securing approval is little greater than flattery from GFG in an overwritten letter from their PR crew,” stated the spokesperson. “He didn’t reply to the letter, or attend the occasion.”
Greensill Capital specialised in provide chain finance, the place companies borrow cash to pay their suppliers, however collapsed final March after dropping insurance coverage cowl for loans issued to its clients.
It emerged that former prime minister Cameron despatched 62 textual content messages to former colleagues pleading for them to assist, whereas incomes hundreds of thousands of kilos as an adviser to Greensill. He had additionally beforehand lobbied ministers and civil servants throughout the federal government to offer Greensill approval handy out Covid loans.
Intensive textual content message lobbying of ministers and high-ranking civil servants on behalf of Greensill Capital confirmed a “vital lack of judgment”, an official parliamentary inquiry has discovered.
The Treasury choose committee stated it was inappropriate for the ex-prime minister to ship 62 messages to former colleagues pleading for them to assist the financial institution, wherein Cameron held a “very vital private financial curiosity”.
Cameron earned hundreds of thousands of kilos as a boardroom adviser to Greensill, the lending start-up based by Australian banker Lex Greensill. Cameron final yr disclosed a collection of textual content messages lobbying ministers and civil servants throughout the federal government to offer his employer approval handy out Covid loans.
A parliamentary inquiry discovered that Cameron confirmed a “vital lack of judgment” however didn’t break lobbying guidelines. It stated: “That displays on the inadequate energy of the foundations.”
In June 2020, Cameron texted Zahawi: “Lex Greensill … says you’re being v useful over HMT and CBILS programme,” in accordance with the previous prime minister’s disclosures to the Treasury choose committee, which didn’t embody a response from Zahawi.
GFG has beforehand denied wrongdoing and stated it’s going to co-operate with the SFO investigation.