SFO launches money laundering probe into Gupta family over ties to Greensill Capital

The Serious Fraud Office (SFO) said this morning it is launching an investigation into the Gupta Family Group Alliance.

“The SFO is investigating suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance (GFG), including its financing arrangements with Greensill Capital UK Ltd.,” the watchdog said in a statement.

“As this is a live investigation, the SFO can provide no further comment,” it added.

In a statement, the company responded: “GFG Alliance notes the UK Serious Fraud Office’s announcement that it has opened an investigation into GFG Alliance. GFG Alliance will co-operate fully with the investigation.”

Turbulent week

The SFO investigation follows a turbulent week for Greensill investors, after David Cameron told MPs he was paid ‘generous amounts’ by the firm.

“I was paid an annual amount, a generous annual amount – far more than I earned as prime minister,” the former prime minister said.

Cameron told Westminster’s Treasury Select Committee that his almost 60 emails, texts and Whatsapp messages to figures like Rishi Sunak to curry favour for Greensill’s application to an emergency funding scheme was not because the firm was in danger of going bust.

“The fact I had this economic interest, serious economic interest, is important, but I don’t think the amount is particularly germane to answering those questions and as far as I’m concerned it’s a private matter.”

Insolvency looms

Greensill Capital is facing insolvency after its main insurer stopped providing credit insurance on $4.1bn of debt in portfolios it had created for clients including Credit Suisse.

The firm was the brainchild of former Citigroup and Morgan Stanley financier Lex Greensill and received backing from Softbank’s Vision Fund.

Greensill lent money to firms by buying their invoices at a discount, but collapsed in March after insurers pulled their cover.

It specialised in supply chain finance and claimed to lower costs before grabbing headlines after crashing into insolvency last month.

FCA probe

Britain’s Financial Conduct Authority said on Tuesday it was formally investigating the UK operations of Greensill as part of global probes.

The watchdog’s chief executive Nikhil Rathi gave the first confirmation the regulator is investigating Greensill seen it collapsed into administration in March.

“The FCA is formally investigating matters relating to Greensill Capital UK (GCUK) and Greensill Capital Securities (GCSL) and the oversight of GCSL by its principal, Mirabella Advisers, ” he said in a letter to Treasury Select Committee chair Mel Stride.

“We are also cooperating with counterparts in other UK enforcement and regulatory agencies, as well as authorities in a number of overseas jurisdictions,” Rathi added.

The SFO’s target of investigation, GFG Alliance, is a network of hundreds of privately-held firms with interests spanning steel, mining and real estate.

The company, which employs 35,000 people worldwide and has annual revenues of $20bn, has come under fire after the Greensill collapse showed it had been a recipient of financing based on expected future invoices, for sales that had only been predicted.

The SFO announcement came a day after Gupta pulled funding from the troubled Wyelands Bank, after its accounts revealed that repayments on 80 per cent of its loan book were overdue.

The Prudential Regulatory Authority order for deposits to be repaid was initiated after the unfolding crisis at Greensill Capital, which was a large provider of loans to Gupta’s GFG Alliance.