Greensill’s Ex-Chair Is Shareholder in Group’s Rating Firm
(Bloomberg) -- The ex-chairman of Greensill Capital’s supervisory board is also a shareholder and advisory board member of Scope Ratings, a Berlin-based company that rated the creditworthiness of the fallen firm’s shuttered German bank.
Maurice Thompson’s investment in Scope emerged in company filings reviewed by Bloomberg and was confirmed by a spokesman. The firm recently assigned an investment-grade rating to Greensill’s fully-owned banking subsidiary. Scope’s policies state that it won’t issue a credit rating if a person owning more than 5% in Scope is also a member of the administrative and supervisory board of the rated entity or related third party.
“Thompson is not a relevant shareholder within the meaning of the regulation,” a spokesman for Scope said by email, signaling his holding is below the 5% limit. Thompson couldn’t immediately be reached for comment.
Greensill Bank was placed under moratorium by Germany’s financial watchdog last week, meaning no money can get in and out. Regulators made the decision after finding irregularities in how Greensill Bank booked assets tied to a key client of Greensill Capital, British industrialist Sanjeev Gupta.
The small bank in Northern Germany served as funding source for its parent company by collecting deposits in Germany and using those deposits to provide short-term loans, much of them to firms linked to Gupta. The interest rates offered by Greensill were some of the highest among Germany-based banks, Bloomberg News has reported.
The rating committee at Scope, led by analyst Dierk Brandenburg, used to rate Greensill Bank as BBB+, placing it well into investment grade. The German city of Giessen, which has 10 million euros in deposits locked up at the lender, said in a press release Monday that it considered the credit rating during its investment decision.
About 50 other municipalities have hundreds of millions of euros deposited at the bank. They fear all of it may be lost as the money isn’t covered by any of the country’s deposit insurance programs.
Greensill Capital, named after the eponymous founder Lex Greensill, filed for administration in the U.K. on Monday. The firm is in the process of being broken up and Thompson has resigned from the supervisory board.
Boersen-Zeitung first reported Thompson’s advisory board role at Scope.
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