The business empire of Liberty Steel owner Sanjeev Gupta is under investigation by the Serious Fraud Office – including links to failed finance firm Greensill Capital.
Financial experts at the SFO are looking into suspected fraudulent trading and money laundering at companies in the GFG Alliance.
It will include the links to Greensill, which entered administration earlier this year.
The investigators said in a statement on Friday: ‘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.
Sanjeev Gupta, head of the GFG (Gupta Family Group) Alliance, gestures as he speaks
Lex Greensill, whose firm is at the heart of a lobbying row featuring former prime minister David Cameron, told MPs today he was sad that 1,000 had lost their jobs with the firm
‘As this is a live investigation, the SFO can provide no further comment.’
Mr Gupta’s companies were among the main clients of Greensill Capital before it collapsed earlier this year.
GFG’s reliance on Greensill caused many to worry that it might itself be at risk following the finance firm’s demise.
Mr Cameron (pictured with Lex Greensill on a visit to Saudia Arabia last year) has denied breaking any lobbying rules, but admitted he should have made approaches in a formal way
Greensill boss sorry for the collapse of firm
The boss of collapsed finance company Greensill apologised and said he takes full responsibility as the City watchdog launched a probe into the firm.
Lex Greensill, whose firm is at the heart of a lobbying row featuring former prime minister
But he sidestepped questions about his relationship with companies like Liberty Steel – which faces an uncertain future – for legal reasons.
Australian banker Mr Greensill said ‘Please understand that I bear complete responsibility for the collapse of Greensill Capital.
‘I am desperately saddened that more than 1,000 very hard working people have lost their jobs at Greensill. Likewise I take full responsibility for any hardship being felt by our clients and their suppliers, and indeed investors in our programmes.’
The SFO did not reveal any further details about what it is looking into.
The Financial Times has previously reported Mr Gupta’s companies handed suspicious invoices to Greensill, which the finance company paid for.
Greensill’s model worked by placing itself between business customers and their suppliers. It would immediately pay the invoices that suppliers gave to their customers, meaning the suppliers would not have to wait for months for payment.
The FT said one of Mr Gupta’s companies had sent Greensill invoices for business it had supposedly done with four European metal companies. The companies told the newspaper they had not dealt with GFG.
In response, GFG Alliance said the invoices were for products it expected to perhaps sell in the future.
It said: ‘Many of Greensill’s financing arrangements with its clients, including with some of the companies in the GFG Alliance, were prospective receivables programmes, sometimes described as future receivables.
‘As part of those programmes, Greensill selected and approved companies with whom its counterparties could potentially do business in the future.’
Earlier this week Greensill founder Lex Greensill and David Cameron, who lobbied for the company, appeared before Parliament.
Tips to Find Low Priced Luxury Holiday Package Deals Fast