German authorities have launched a major criminal case against three former executives of the failed Greensill Bank, directly linking their actions to the lender's dramatic 2021 collapse.
Charges Filed in Bremen
The Bremen public prosecutor's office confirmed on Wednesday that it has filed charges against three unnamed individuals for crimes related to the bank's bankruptcy and the alleged misrepresentation of its financial health. Two of the accused were formerly members of the bank's management board, with the third serving on its supervisory board.
Central to the case is a €2.2 billion (approximately £1.9 billion) refinancing deal in 2019 for steel plants owned by the Gupta Family Group Alliance (GFG). Prosecutors allege the trio deliberately circumvented banking regulations to facilitate this transaction for the struggling industrial group, which is overseen by metals magnate Sanjeev Gupta.
The Alleged Fraud and Global Fallout
The prosecutors' statement claims there is a strong suspicion that "the accused deliberately misrepresented the loan business in the 2019 accounting records and financial statements as a low-risk and regulatory-compliant receivables purchase programme." They assert that this specific refinancing operation was a primary cause of the bank's eventual failure.
Greensill Bank was founded by Australian financier Lex Greensill, whose supply chain finance firm rose rapidly to prominence and even employed former UK Prime Minister David Cameron as an adviser. It is understood that Lex Greensill himself is not among those charged by the Bremen authorities. The bank was based in the northern German city of Bremen.
This German lawsuit adds a significant new layer to the widespread legal fallout from the Greensill empire's disintegration. Separately, the UK's Serious Fraud Office has been conducting an investigation since 2021 into suspected fraud and money laundering concerning GFG companies and their financing arrangements with Greensill Capital UK.
Turmoil in the Steel Industry
The collapse of Greensill sent shockwaves through Sanjeev Gupta's global network of metals businesses, which suddenly lost a key financier. The scramble for alternative funding has led to Gupta losing control of several major operations worldwide.
The repercussions have been acutely felt in the UK. In August, the High Court placed Speciality Steel UK into administration, a move that forced the UK government to step in to ensure the continued operation of critical steelworks in South Yorkshire. This intervention highlights the strategic national importance of the assets once entangled with Greensill's financing.
A spokesperson for GFG Alliance declined to comment on the latest developments in Germany. It is understood that GFG companies have not been part of the German prosecutor's investigation or the related proceedings.
