France Probes Missing Greensill Loan to GFG Smelting Plant

The disappearance of a loan provided by failed startup lender Greensill Capital to a French aluminum smelting plant linked to industrialist Sanjeev Gupta’s GFG Alliance Ltd. is the focus of a preliminary investigation in France.

The case relates to a state-backed loan worth about 18 million euros ($21 million) provided to a GFG-owned site, Liberty Alumnium Poitou, in central France, according to local media. Local investigators will seek to determine whether any criminal offense took place, an official from France’s industry ministry said.

Liberty Aluminium Poitou’s general management couldn’t be reached for comment. Local prosecution office didn’t answer several requests to comment. A spokesman for Grant Thornton Ltd., which has been appointed as Greensill Capital’s administrator, declined to comment.

According to local newspaper La Nouvelle Republique, the Liberty Aluminium Poitou smelting plant received the loan in December but Greensill then requested the money be sent back in line with a two-month waiting period on such loans. The funds were never sent back to the plant after that period, the newspaper reports.

The official at the industry ministry said the state will support the business with its cash needs if necessary, but not bail out shareholders.

Earlier in March, the French state provided a 20 million-euro loan for the Ascoval steelworks, which is owned by Gupta’s Liberty Steel. French Finance Minister Bruno Le Maire said last week that the state is closely monitoring all businesses in France owned by the Liberty group and will provide all the “necessary support” for workers.

Greensill’s collapse earlier this month has raised many questions about how it went from startup to tech unicorn with an estimated $7 billion valuation. The scandal has also affected GFG whose biggest lender was Greensill.

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