German Regulator Takes Oversight of Greensill Bank After Probe

German financial regulator BaFin appointed a special representative to oversee day-to-day operations of Greensill Capital’s banking unit in the country, according to a person familiar with the matter.

The move comes after BaFin spent months probing Greensill Bank AG’s exposure to companies linked to U.K. industrialist Sanjeev Gupta, said the person, who asked not to be identified because the matter is private.

“There has been an ongoing regulatory audit of the bank since autumn,” a Greensill spokesman said. “This regulatory audit report has specifically not revealed any malfeasance at the bank. We have constructive ongoing dialog with all regulators in all jurisdictions where we operate.”

BaFin declined to comment. The appointment was reported by the Financial Times earlier Tuesday.

Bloomberg reported in August that BaFin was considering imposing caps on exposure to Gupta or additional capital demands for the banking unit. A crisis in confidence has since pushed Greensill to seek a sale of the firm to avoid collapse.

The German regulator could impose a freeze on payments in and out of the bank, said the person familiar with the matter.

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