Greensill Bank used loans from three EU governments to cut exposure to companies owned by Sanjeev Gupta in a bid to quell concerns by regulators over its lending to Gupta’s GFG Alliance, according to the Financial Times.
The Bremen-based subsidiary came up with a plan last year to use government guarantees to offset its credit risk, the FT said, citing a report by the bank’s administrator CMS Hasche Sigle.
Greensill would use government-backed loans extended to three GFG companies from France, Italy and the Czech Republic, worth a combined 190 million euros ($225 million), as cash collateral against the bank’s existing loans to GFG.
Both GFG and Greensill declined to comment to the FT.
