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Greensill: Politicians, financiers linked to scandal

BRITAIN CAMERON
David Cameron, the former prime minister of Britain, in his office in central London, September 19, 2019. The former British prime minister has lobbied the government on behalf of an Anglo-Australian finance firm, Greensill Capital. While apparently legal, his activities set off a debate about lobbying by former leaders. (Photo: NYTimes)
LONDON, United Kingdom — The collapse of Greensill Capital has sparked a political scandal in Britain and cast a light on a shadowy world of finance.

Outlined are the main political and financial personalities caught up in the affair:

David Cameron

Former British prime minister David Cameron, who resigned his premiership after backing the losing horse in the 2016 Brexit referendum, is the biggest name dragged into the scandal.

An adviser to Greensill after leaving office, Cameron privately lobbied senior UK government officials, including finance minister Rishi Sunak, for state support before the firm’s business model of supplying interim finance to companies imploded.

Cameron, whose bumper Greensill shares have become worthless, is most directly in the firing line because of his personal and undeclared lobbying. He denies any impropriety.

Lex Greensill

Lex Greensill, the Australian financier who in 2011 founded the London-headquartered Greensill Capital, obtained inside access to the Downing Street machine during Cameron’s spell as prime minister.

This after offering to advise the government on financial technology.

Greensill, the 44-year-old son of sugar cane planters, has been largely silent since his group went bankrupt.

His company, which bypassed strict regulations forced upon traditional banks, specialized in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency last month.

Sanjeev Gupta

The Indian-British billionaire and his GFG Alliance steel empire have both been rocked by the Greensill collapse.

Not only has it been suggested that thousands of steel-sector jobs are at risk due to GFG having been Greensill’s biggest client, the affair has shone a light on Gupta’s own criticized business practices.

The UK government last month refused GFG a rescue package totaling £170 million.

That came as Britain’s business minister Kwasi Kwarteng described the GFG structure as “very opaque”.

Investors

Some of the world’s biggest banks have become caught up in the scandal.

It was creditors including Credit Suisse and the Association of German Banks who on Thursday placed the Australian parent of Greensill Capital into liquidation.

Switzerland’s second-largest bank — rocked also by the bankruptcy of US hedge fund Archegos — has been forced to suspend four funds with an exposure to Greensill totaling $10 billion.

In Japan, Softbank is counting the cost after investing $1.5 billion in Greensill two years ago.

And the Association of German Banks counts losses of 2 billion euros after investing communities’ money with the Bremen-based subsidiary of Greensill.


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