Lawmakers Say British Business Bank Failed on Greensill Scrutiny

(Bloomberg) -- British Business Bank’s failure to properly scrutinize collapsed lender Greensill Capital has put as much as 335 million pounds ($451 million) of U.K. taxpayers’ money at risk, according to a U.K. parliamentary committee.

The bank’s “approach to due diligence in accrediting Greensill was woefully inadequate,” the House of Commons public accounts committee said in a report published on Saturday.

Greensill was accredited as a lender through programs set up by the U.K. government and the British Business Bank to provide emergency support to companies struggling with fallout from the pandemic lockdown last year. Greensill lent 350 million pounds to corporate entities linked to steel tycoon Sanjeev Gupta’s GFG Alliance, “appearing to contravene” a 50 million-pound lending limit, the report said. 

The bank also “has been insufficiently curious when identifying where money lent through the schemes, including by Greensill, has ultimately gone,” according to the report.

Gupta’s GFG faces a Serious Fraud Office probe, which relates to suspicions of fraud and money laundering as well as the group’s financing arrangements with Greensill. 

Greensill, which specialized in so-called supply chain finance, collapsed in March in one of biggest financial blow-ups in recent years. The proximity of Greensill to parts of the British government has since been scrutinized, with former U.K. Prime Minister David Cameron lobbying to include Greensill in a state-backed Covid lending program.

©2021 Bloomberg L.P.