The business empires of metal tycoon Sanjeev Gupta and financier Lex Greensill have supported each other to fuel their growth. But for years, executives and advisers close to both entrepreneurs have urged the two men to separate their businesses, according to people familiar with the matter.
They failed to do so. Greensill Capital is now insolvent, and Mr Gupta’s conglomerate, the GFG Alliance, is struggling to survive.
Greensill’s implosion caught a number of financial firms, including Credit Suisse Group AG, which froze $ 10 billion of the funds it manages with the firm. Regulators took over the supervision of the German bank Greensill after they said a special audit found suspicious accounts related to Mr Gupta. The move came despite a last-ditch attempt by SoftBank Group Corp., Greensill’s largest foreign investor, to intervene directly with the regulator.
For the GFG Alliance, which hosts the Gupta family’s steel, aluminum and energy businesses and generates $ 20 billion in annual revenue, its main source of funding has suddenly dried up.