Greensill Bank suing UK government for $441 million over COVID loan guarantees

Greensill Bank, a subsidiary of collapsed finance firm Greensill Capital, is suing UK’s business department for just over 330 million pounds ($441.7 million) after it cancelled guarantees for COVID-19 business loans, court documents showed.

The administrators of the German-based bank sued the UK Department of Business and Trade (DBT) last year after the government terminated guarantees for loans made by Greensill Capital to businesses linked by commodities tycoon Sanjeev Gupta.

Greensill Bank is seeking 331 million pounds which it says is payable under two guarantee agreements reached in 2020, months after the pandemic began.

But the UK government’s lawyers said in court documents, produced for a hearing at London’s High Court on Thursday, that it was entitled to terminate the guarantees because Greensill Bank breached the terms of the scheme.

Six of the borrowers, each of which was “ultimately owned” by Gupta, were granted a total of 300 million pounds when the COVID-19 loans scheme only allowed 50 million pounds to be given to a single group, DBT’s lawyers argue.

The lawsuit is the latest concerning the 2021 collapse of Greensill, which caused heavy losses for investors and prompted lawsuits and regulatory probes.

Greensill’s largest client was Gupta’s GFG Alliance, which has been refinancing its businesses in steel, aluminium and energy after Greensill filed for insolvency in 2021.

The government took control of Yorkshire-based Speciality Steel UK, one of Britain’s largest steelworks, last year.

Home REIT: UK social housing firm faces $404 million fraud, bribery probe

UK’s Serious Fraud Office has arrested six people in an estimated 300 million pound ($404 million) bribery and fraud investigation into the former management of social housing group Home REIT, it said.

Home REIT, which listed on the London Stock Exchange in 2020, spent millions on properties across the UK that were supposed to house vulnerable people. It raised more than 850 million pounds in its first three years of trading.