News Nov 14, 2023 05:45 AM EST

David Cameron's Return Stirs up Memories of Greensill Financial Controversy

By April Fowell

David Cameron's direct connection to one of the UK's largest financial scandals in recent memory has been disregarded by Rishi Sunak in his appointment to one of the top four state posts.

Two years ago, internal records obtained by BBC Panorama suggested that Mr. Cameron traveled the world for almost $10 million (£8.2 million) to promote Greensill Capital, a very contentious financing company.

Under Mr. Cameron's government, Greensill-whose discredited CEO Lex Greensill was given an office in Downing Street and eventually became both his buddy and his employer-collapsed in March 2021.

Investor capital worth billions of dollars went gone.

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(Photo : by Carl Court/Getty Images)
LONDON, ENGLAND - NOVEMBER 13: Britain's former Prime Minister, David Cameron (L), leaves 10 Downing Street with Sir Philip Barton, the Permanent Under-Secretary of the Foreign, Commonwealth and Development Office, after being appointed Foreign Secretary in a Cabinet reshuffle on November 13, 2023 in London, England.

Lex Greensill Faces Criminal Investigations Amid Allegations of Fraud in Germany and Switzerland

Lex Greensill is a suspect in the current criminal investigations investigating claims of fraud in Germany and Switzerland.

Lex Greensill had previously refuted claims made by Members of the Commons Treasury Committee in 2021 that his bankrupt financing company was a "fraud" or a "Ponzi scheme," attributing its demise to the insurers' withdrawal of coverage.

Prior to the disclosures published by Panorama, Cameron had consistently declined to inform Parliament of the amount of money he earned by endorsing Greensill to investors, some of whom were Credit Suisse clients in Switzerland.

Greensill Capital positioned itself as a high-tech provider of supply chain finance, allowing small businesses to borrow money against their invoices while they wait for client payment.

With money from Credit Suisse clients, it provided loans totaling over $10 billion, many of which were given to businesses that subsequently proved unable to pay back. Administrators still have almost $2 billion to retrieve after more than two years.

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Credit Suisse's Downfall and GFG Alliance's $5 Billion Loan: Investigations Unveil Ties with Greensill Capital

One of the things that led to Credit Suisse's bankruptcy in March of this year was losses on Greensill's loans.

A collection of businesses founded by steel mogul Sanjeev Gupta, GFG Alliance, received a loan of about $5 billion (£3.6 billion) from Greensill Capital.

At present, the Serious Fraud Office is investigating Sanjeev Gupta's GFG group and its association with Greensill Capital. The organization has always denied accusations of misconduct.

GFG Alliance, Mr. Gupta's family company, stated it will fully cooperate with the probe when it was first disclosed in 2021.

The scandal's book author, Duncan Mavin, stated: "It's an astonishing decision for David Cameron to be appointed when all the lawsuits and criminal investigations are still underway."

Cameron exerted intense pressure on public workers in 2020 to let Greensill to lend £10 billion under emergency Covid lending programs, prior to Greensill Capital's bankruptcy in March 2021. He did this by making several phone calls, sending numerous messages, and sending numerous emails.

Greensill was finally granted permission by the British Business Bank (BBB) to lend a smaller sum of taxpayer-guaranteed money under the government's CLBILS (Coronavirus Large Business Interruption Loan Scheme) emergency lending program for medium-sized enterprises.

Subsequently, it emerged that Cameron had been in contact with Nadhim Zahawi, a junior minister of business at the time (who would go on to become chancellor of the exchequer) and who was allegedly instrumental in persuading the BBB to sanction Greensill's loan.

Within a few weeks, Greensill gave eight companies associated with steel tycoon Sanjeev Gupta loans reaching the maximum sum of £400 million. The parameters of the plan banned lenders from giving more than £50 million to a single business. The government says it would not uphold the promises made on the loans.

The creator of Greensill Capital, Lex Greensill, stated that in order to guarantee Greensill adhered with applicable regulations, Greensill "always drawn upon robust advice from leading law firms" when gaining access to any government-backed initiatives.

A representative for David Cameron previously told the BBC that he always behaved in good faith and that none of his acts were improper.

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