London Eye | A shadow fails to leave Cameron, and Gupta

Cameron was cleared by the lobbying watchdog in April over a technicality; he joined Greensill formally as lobby exactly two years after he quit as Prime Minister. Labour sought then to have a new and wider select committee of parliament look into the allegations, but Conservative MPs loyal to Cameron initially blocked the move.

But a Treasury select committee found in July this year that the barrage of text messages Cameron sent to top civil servants on behalf of Greensill showed “significant lack of judgment.” It noted that Cameron had a “very significant personal economic interest” in Greensill Capital. Greensill collapsed in March after failing to secure insurance covers over bad loans it issued to its customers – Gupta primary among them.

The committee could do no more than make an observation. It found that the law against lobbying by persons in high office was too weak for any further action to be taken against Cameron.

The Financial Times now reports that Cameron lobbied the Lloyds Banking Group to reverse a decision to cut ties with Greensill Capital through a board member of Lloyds who he had appointed to the House of Lords in 2015.

The FT reports that Cameron asked James Upton, now Lord James Upton following his intervention, to persuade Lloyds to continue to do business with Greensll. Upton had earlier been a Conservative Party treasurer, and has donated more than three million pounds to the Conservative Party.

Cameron is reported to have earned several millions of pounds in fees as boardroom advisor to Greensill. He was also found to have used a Greensill private jet to fly often to his family home in Cornwall. The BBC reports that Cameron earned about USD 10 million over a couple of years through part-time work for Greensill. Cameron quit as PM in July 2016.

Anticipating the collapse of the firm, Lloyds had warned it would stop doing business with Greensill. That then risked financing for a number of National Health Service pharmacies that were financed by Greensill and that in turn relied on Lloyds for funding. After Cameron’s intervention, Lloyds agreed to continue to finance Greensill. The bank eventually recovered its money when Greensill went into administration.

One of the biggest holes in finances that brought Greensill down was its support to Sanjeev Gupta’s Liberty group. The BBC reports that Greensill Capital lend about USD 5 billion to Sanjeev Gupta’s group of companies called the GFG Alliance that included the Liberty steel group.

Gupta’s group had begun to fail to make payments on Greensill loans since early 2020. By the end of the year it was clear to Greensill and to those dealing with it that the company was failing. The NHS funding was covered by government guarantees, the GFG loans were not. Cameron’s assurances to Lloyds were based on the promise that the taxpayer would see that the loans would be repaid, and they were.

Nothing has quite filled the billions lost to Gupta’s group. Greensill used funds of its own from elsewhere at first to repay the loans that the GFG Alliance could not. As early as May 2020 an internal note within Greensill warned that Gupta’s business may have to be put in administration. All the recirculation of funds finally failed to add up, and Greensill collapsed in March.

Cameron had acknowledged there were difficulties with Greensill by December 2020. He then lobbied extensively for government finance to be made available to Greensill to save the company from going down. He asked the Bank of England to put 10 million pounds to save Greensill. The Bank of England refused.

Greensill continued, however, as an approved lender under The Coronavirus Large Business Interruption Loan. The loans advanced by Greensill were backed by an 80 percent government guarantee.

Sanjeev Gupta is now being investigated by the Serious Fraud Office over its financing arrangements with Greensill Capital.