Greensill Bank Sues UK Government for $441 Million Over COVID Loan Guarantees

Greensill Financial institution, a subsidiary of collapsed finance agency Greensill Capital, is suing Britain’s enterprise division for simply over 330 million kilos ($441.7 million) after it canceled ensures for COVID-19 enterprise loans, courtroom paperwork confirmed.

The directors of the German-based financial institution sued Britain’s Division of Enterprise and Commerce (DBT) final yr after the federal government terminated ensures for loans made by Greensill Capital to companies linked by commodities tycoon Sanjeev Gupta.

Greensill Financial institution is searching for 331 million kilos which it says is payable beneath two assure agreements reached in 2020, months after the pandemic started.

However the British authorities’s legal professionals mentioned in courtroom paperwork, produced for a listening to at London’s Excessive Court docket on Thursday (Jan. 15), that it was entitled to terminate the ensures as a result of Greensill Financial institution breached the phrases of the scheme.

Six of the debtors, every of which was “finally owned” by Gupta, have been granted a complete of 300 million kilos when the COVID-19 loans scheme solely allowed 50 million kilos to be given to a single group, DBT’s legal professionals argue.

The lawsuit is the newest in regards to the 2021 collapse of Greensill, which brought on heavy losses for traders and prompted lawsuits and regulatory probes.

Greensill’s largest shopper was Gupta’s GFG Alliance, which has been refinancing its companies in metal, aluminum and power after Greensill filed for insolvency in 2021.

The federal government took management of Yorkshire-based Speciality Metal UK, considered one of Britain’s largest steelworks, final yr.

($1 = 0.7472 kilos)

(Reporting by Sam Tobin; modifying by Susan Fenton)

{Photograph}: AdobeStock. Generated with AI