The impact of Greensill Capital collapse on GFG Alliance and the UK steel making industry

Following the collapse of Greensill Capital in March 2021 many expected Sanjeev Gupta’s GFG Alliance metals empire to follow close behind. MetalMiner wasn’t alone in repeatedly questioning the murky financial structure of the sprawling group. Some media outlets suggested it reflected fraud bordering on a ponzi scheme. To most parties’ surprise, GFG has limped on for the last eleven months since Greensill’s collapse.
UK’s third largest steel producer
The temporary UK government moratorium bankruptcy proceedings due to the pandemic, only expired late last year. Surprisingly, the coup de grâce comes not from the aggrieved trade creditors, but from the British Government. In other words, the taxman has come to collect. Her Majesty’s Revenue & Customs (HMRC) has tried to force four companies in Sanjeev Gupta’s UK steel empire, into insolvency. This threatens the employment of close to 2000 people. This move could bring to an end Britain’s third largest steel producer. Although precise figures remain uncertain, the debts to the tax authorities alone run into tens of millions of pounds. £27m ($36.56m) one source suggested, with another investigation gathering speed into alleged fraudulent accounting at a sister enterprise, Liberty Commodities.
Tough pill to swallow for British steel-making
The move to shut down UK divisions of Gupta’s empire lands a tough blow for UK steel making in general. The companies involved all produce high-grade anti corrosion steels used in the oil and gas industry and aerospace.  This alone makes them valuable assets in a country with precious little steelmaking left. According to a post in the Guardian newspaper, the four companies having action taken against them include:

  • Liberty Merchant Bar at Scunthorpe in North Lincolnshire.
  • Speciality Steel UK, which employs close to 2,000 people at Rotherham and Stocksbridge in South Yorkshire.
  • Liberty Performance Steels Ltd at West Bromwich in the West Midlands
  • Liberty Pipes at Hartlepool in County Durham

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GFG Alliance has already sold or shuttered numerous companies in a desperate scramble to shore up its finances. Greensill Capital’s failure has also limited GFG’s ability to replace them. That failure says something about the quality of the group’s financial position. Some standalone companies such as car parts maker Liberty Aluminium Technologies (LAT) in the UK and steel companies in Europe have found buyers. But the remaining divisions have not found backers. The giant Aluminium Dunkerque operation reached a re-financing agreement with American Industrial Partners Capital Fund. Late last year however, AIP took title to the plant.
The end of the road for GFG and Liberty Steel?
Does this mark the last chapter of GFG and Liberty Steel? Perhaps it seems a little too early to write off Gupta. He is after all, a survivor.  However, if he manages to hold his dwindling empire together, the result may only look like a shadow of its former self.


  • It seems unlikely that there will be many tears shed if Mr Gupta does get written-off, as he has syphoned off many millions for himself and left a legacy of broken promises.

  • How would it impact the iron & steel industry in India? Big boys like Tata Steel, Jindal, etc


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