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London Eye |  A shadow fails to leave Cameron and Gupta


On the face of it, former Prime Minister David Cameron was cleared in a parliamentary inquiry into allegations of improper advancement by collapsed financial firm Greensill. But new revelations in the Financial Times suggest the clearance may have come too soon.

It would not be unusual in Britain. The fiction series Yes Minister and then Yes Prime Minister followed a long-standing British tradition of defusing a crisis by ordering an investigation, then ensuring that the investigation wipes out some prominent favorites, after including a slight censorship to give the investigation some credibility. .

The charges against Cameron are serious, according to which he used his connections as a former Prime Minister to promote the Greensill Company which paid him to act on his behalf. Greensill was the main finance company backing the dubious steel adventurer Sanjeev Gupta’s Liberty group.

Cameron was cleared by the lobbying watchdog in April on a technicality; he officially joined Greensill as a lobby exactly two years after leaving his post as prime minister. Labor then sought a new select committee of Parliament to examine the allegations, but Tory MPs loyal to Cameron initially blocked the move.

But a select Treasury committee found in July this year that the barrage of text messages Cameron sent to senior officials on Greensill’s behalf showed “a significant lack of judgment.” He noted that Cameron had a “very significant personal economic interest” in Greensill Capital. Greensill collapsed in March after failing to secure insurance coverage on bad debts he issued to his clients – Gupta first among them.

The committee could only comment. He found that the law banning lobbying by people in high office was too weak for further action to be taken against Cameron.

Lord

The Financial Times now reports that Cameron pressured the Lloyds Banking Group to reverse its decision to sever ties with Greensill Capital through a member of the Lloyds board he appointed to the House of Lords in 2015.

The FT reports that Cameron asked James Upton, who became Lord James Upton as a result of his intervention, to persuade Lloyds to continue doing business with Greensll. Upton was previously Conservative Party Treasurer and donated over £ 3million to the Conservative Party.

Cameron is said to have earned several million pounds in fees as an advisor to Greensill’s board of directors. It was also discovered that he had used a Greensill private jet to frequently travel to his family home in Cornwall. The BBC reports that Cameron made around $ 10 million over a few years working part-time for Greensill. Cameron resigned as Prime Minister in July 2016.

Anticipating the collapse of the company, Lloyds had warned that it would stop doing business with Greensill. This then risked funding a number of National Health Service pharmacies funded by Greensill which in turn depended on Lloyds for funding. After Cameron’s intervention, Lloyds agreed to continue funding Greensill. The bank finally got his money back when Greensill took office.

Gupta

One of the biggest financial holes that brought Greensill down was his support for Sanjeev Gupta’s Liberty group. The BBC reports that Greensill Capital loaned around $ 5 billion to the Sanjeev Gupta group of companies called GFG Alliance which included the Liberty Steel group.

Gupta’s group had started defaulting on Greensill’s loans since early 2020. By the end of the year, it was clear to Greensill and those dealing with her that the company was bankrupt. NHS funding was covered by government guarantees, GFG loans were not. Cameron’s assurances to Lloyds were based on the promise that the taxpayer would see the loans paid off, and they have been.

Nothing quite made up for the billions lost for the Gupta group. Greensill initially used his own funds from elsewhere to repay loans that the GFG Alliance was unable to. As early as May 2020, an internal memo within Greensill warned that Gupta’s affairs may need to be put into administration. All the recirculation of funds ultimately failed, and Greensill collapsed in March.

Cameron had acknowledged that there were difficulties with Greensill in December 2020. He then lobbied extensively for public funding to be made available to Greensill to prevent the company from going down. He asked the Bank of England to put £ 10million in to save Greensill. The Bank of England refused.

Greensill, however, continued as the approved lender on the Coronavirus Large Business Interruption Loan. The loans made by Greensill were backed by an 80% government guarantee.

Sanjeev Gupta is currently under investigation by the Serious Fraud Office regarding its funding arrangements with Greensill Capital.

(Edited by : Priyanka Deshpande)

First publication: STI


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