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