Sanjeev Gupta’s GFG Alliance Under Investigation By French Officials

Sanjeev Gupta’s GFG Alliance is facing an investigation by French authorities into allegations that the firm may have been involved in misuse of corporate assets and money laundering, among other charges.

This week’s revelation is yet another blow to GFG Alliance, which has been navigating the stormiest of seas since major financial backer Greensill Capital became insolvent in March. Greensill’s demise led to a series of negative events for the firm, including a mad dash for funding elsewhere and investigations by regulators in the UK and Germany.

French investigators confirmed on Monday that they are looking into “various operations” of GFG’s, including possible money laundering and misuse of corporate assets. The investigation began on July 23, they advised.

For its part, a GFG spokesperson says it does not know of any such investigation being carried out against it.

“GFG is not aware of any such investigation and refutes any suggestion of wrongdoing in its French operations.”

Among GFG’s operations in France are the Dunkirk aluminium smelter, which is the largest aluminium smelter on the continent. However, ownership of that asset is highly contested after American Industrial Partners claimed ownership last month due to GFG’s alleged default on a financing agreement with them relative to the plant.

The activity under investigation surrounds a deal between GFG and Glencore plc to refinance a deal to keep operations at the Dunkirk aluminium smelter ongoing. Few other facts about the investigation are available so far.

GFG went on record this week defending its actions in the financing agreement with Glencore.

“There was a commercial agreement with Glencore at market rates to secure stable financing for the business. We abided by all the rules and invested €45m [US$52 million] of shareholder funds into French downstream assets including Poitou while under our ownership.”

For its part, Glencore maintains that it “entered into arm’s length commercial arrangements with Dunkirk which were actively negotiated and were the subject of due diligence and review”