Greensill Bank used state-owned loans from three European governments to reduce its presence in Sanjeev Gupta’s companies, pointing out the number of potential taxpayers at risk for the magnate business.
The plot, which is described in Financial Times documents, highlights the tactics used by Greensill Bank in an attempt to reassure borrowers involved in the risk of being loaned by GupG Alliance of Gupta.
The Greensill Capital real estate broker collapsed in March, which resulted political and economic developments around the world. The lending relationships to Gupta companies are currently aimed at a investigating cases and the UK’s Chief Corruption Bureau at GFG.
Last year, the Greensill banking company in Bremen met with an increase forced by German financial officials BaFin to reduce its significant return to GFG.
In response, Greensill Bank developed a plan to use government-sponsored financial guarantees to curb its credit risk, according to a bank governor’s report.
At the end of July 2020 Greensill Bank wrote to BaFin a plan for how government-backed loans to three GFG companies from France, Italy and the Czech Republic could be used as cash to repay the bank’s loans to GFG, according to a report by director Michael Frege of German law firm CMS Hasche Sigle.
Greensill Bank’s credit risk to GFG could be reported to governments, the report explains. During the fall of Greensill the GFG companies were in debt to its Bremen bank at more than € 2.8bn, according to a supervisor’s report.
GFG companies in France, Italy and the Czech Republic received four loans worth 190 million euros, after the government provided a guarantee of 80 or 90% of the value of the loan.
Attorneys working for the manager are assessing whether the mortgage debt is being met, according to the report.
The loans were made in addition to $ 400 million in taxpayer-assisted loans to eight Gupta-linked companies under the auspices of the British Coronavirus Large Business Interruption Loan Scheme A FT has already announced that the Guptas have restructured their business last year. increasing the number of taxpayers’ debts in the UK he could get from the plot.
In France, state-owned BPI has secured two loans, of $ 17 million and $ 10 million, which Greensill Bank has made to Alvance Aluminum Group. Liberty Magona Srl, a member of the GFG’s steel industry, received a € 86m loan, with the help of the Sace Writing Agency in Italy. Meanwhile in the Czech Republic, GFG’s LibF Ostrava has received a € 76m loan from Egap.
The whole group was shaken by the fall of Greensill, the main lender. GFG is now trying to rehabilitate and repatriate its subscribers.
Greensill Bank adjustments are taking place investigating cases on suspicion of money laundering, following BaFin’s complaint, which earlier in March ordered the banking business to stop. A legal investigation, conducted by KPMG found that Greensill Bank “failed to provide evidence of the availability of receivables in the balance sheet purchased from the GFG Alliance”.
GFG and Greensill declined to comment.
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