SFO confirms trade fraud and money laundering investigation at Liberty Steel owner’s Gupta Family Group Alliance

The UK’s Serious Fraud Office (SFO) has admitted it 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 collapsed financial services company, Greensill Capital UK Ltd.

As this is a live investigation, the SFO can provide no further comment, but it is widely believed to have been watching Sanjeev Gupta’s diversified business empire for the last year.

Phantom trades

In April, the UK’s Financial Times newspaper reported that several companies named on invoices that GFG sent to its main financial backer, Greensill, in exchange for cash had denied ever doing business with Gupta’s group.

As a result, allegations of trade-based frauds around GFG’s Liberty Steel operations have emerged. The group’s future has been in doubt since its main backer, Greensill Capital, went into administration in March.

The frauds were allegedly perpetrated by GFG and Greensill, which essentially paid GFG’s suppliers and funded the group, even before it had secured payment from the group’s customers.

Credit Suisse exposure

Greensill’s exposure to GFG when it collapsed in March has been estimated at around US$5 billion, leaving its backer Credit Suisse facing huge losses.

The bank provided funding to Greensill on behalf of clients through a fund that collateralised trade finance debts and yielded attractive returns.

Categories: Trade Based Financial crimes News

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