Lex Greensill may have misled Parliament when he said his company was not lending money to its shareholders, two MPs said, citing a € 300million loan that Greensill Capital had made to its General Atlantic private financial backer.
Angela Eagle of Labor and Conservative Harriett Baldwin raised these concerns after Greensill said at a Treasury Select Committee hearing on Tuesday that “neither of the two large institutional shareholders that we have borrowed from Greensill Capital” .
The largest institutions supporting Greensill were General Atlantic, based in the United States, and SoftBank in Japan. General Atlantic bought a minority stake in the UK supply chain finance company in 2018 and borrowed 300 million euros from it the following year.
Greensill’s remarks “raise concerns that we may have misled Parliament,” Eagle said.
“He categorically denied that any Greensill shareholders received any money, when it is clear that they lent money to General Atlantic, so I would like him to correct the case and explain his responses.” , she said.
Baldwin said it was “possible that Mr. Greensill does not have a full recollection of all of these cases” of what she called “close relationships” that “don’t seem to pass a smell test.”
“I am sure he would not have wished he had inadvertently misled the committee, and he may wish to when he sends us further written evidence to correct the record,” she said. .
The two MPs are members of the committee to investigate the collapse of Greensill Capital, a once-popular supply chain finance group that has become a financial and political scandal involving David Cameron, the former British Prime Minister became a paid advisor, and GFG Alliance. , a group of metals left to falter after the insolvency of its largest lender.
Lex Greensill told the FT: “I would be happy to provide any further clarification or explanation on my testimony yesterday if requested by the Treasury Select Committee or any of its members.”
Greensill’s internal documents relating to the General Atlantic loan indicate that Lex Greensill was the “owner of the relationship” and describe the deal as a chance for the now collapsed group to “strengthen their relationship with a major sponsor.” The private equity group has since refinanced the loan in a costly deal with Goldman Sachs.
Responding to Baldwin’s questions at the hearing, Greensill initially said there were no instances of any companies using both his company’s supply chain finance product and also investing in it. Greensill Capital, or in the funds through which supply chain finance agreements were sold. to investors.
When Baldwin challenged him with a Bloomberg report who said that Vodafone had invested in funds which took advantage of its own late payments, he said he had “forgotten this case”.
However, he pointed out, there have been no instances where “people were invested in the capital of Greensill Capital and then we were funding the same company.”
Eagle also raised concerns about Greensill’s statement at the hearing that he had “never heard of the concept” of “potential claims.”
“I read about it in the Financial Times,” he told MPs. “If you looked at the documentation for one of our facilities, you would never see these words appear.”
However, filings in a US lawsuit against Greensill Capital by one of its clients, Bluestone Resources, indicate that the documentation agreed between the two in 2018 includes the phrase “potential claims”.
As part of the deal, Greensill would loan money to Bluestone on the basis of the prospect that it might in the future sell goods to specified companies, including those which “were not and may never. become Bluestone customers, ”according to documents filed by the Bluestone court.
Sanjeev Gupta, the metals tycoon whose GFG Alliance borrowed from Greensill, said in a letter to the FT published last month that he did so under “potential debt” programs.
“I think it’s a very handy memory loss,” Eagle said. “You might think of future receivables like, I’ll be paying my council tax bill every month and I know what’s going to be, so it’s a predictable outgoing future rather than a receivable.
“But what they did with it was just fantasy. At some point, in a possible future, in a possible parallel universe, I might be able to do business with this company. There is no way this is allowed.