Disgraced former financier Lex Greensill has been banned from running a UK company for nine years after being judged unfit due to the 2021 collapse of his supply chain invoicing firm, Greensill Capital, which owed £1.6bn.
The government's Insolvency Service announced on Thursday that Greensill had signed a disqualification undertaking, ending the case before a hearing scheduled for June 8. He had previously attempted to challenge the proceedings, but a court ruled against him in March.
Greensill, a 49-year-old Australian former sugar farmer, rose rapidly in the financial world by lending money to companies secured against unpaid invoices. Greensill Capital collapsed into administration in March 2021 with liabilities exceeding £1.6bn.
The subsequent political and financial scandal involved former Prime Minister David Cameron, who had worked for the company, and Japanese investor Masayoshi Son, whose Softbank backed Greensill. The Treasury Select Committee found in July 2021 that Cameron showed a "significant lack of judgment" in lobbying for Greensill Capital to join a government coronavirus pandemic scheme in 2020 when it was struggling.
The Insolvency Service stated that Greensill breached his legal duty to exercise reasonable care, skill, and diligence as a company director, causing a $440m loss to Swiss bank Credit Suisse, which was later rescued by rival UBS.
Duncan Beach, CEO of the Insolvency Service, said: "Director disqualifications exist to protect the public from those who have demonstrated they are unfit to run companies. A nine-year ban is a significant period – above the average for director disqualifications – and reflects the serious nature of Lex Greensill's conduct." The Insolvency Service had sought a disqualification of up to 15 years.
Greensill's disqualification particularly relates to his company's lending to Katerra, a US construction company. Funds controlled by Credit Suisse bought the loans, which were backed by insurance. However, Greensill directed his companies to enter transactions that removed legal protections from the loan notes, despite lacking required written consents. Credit Suisse ultimately lost its investment.
A spokesperson for Lex Greensill said: "After four years of investigation, this matter has concluded with no finding that Mr Greensill acted dishonestly or in bad faith."
Greensill still faces a separate civil action by administrators for Greensill Capital (UK), in which he is named as a defendant. He was approached for comment on the civil case.
The collapse of Greensill Capital also caused years of chaos for companies owned by Sanjeev Gupta's Gupta Family Group (GFG) Alliance, which relied heavily on Greensill financing. Gupta has since lost control of large parts of GFG's Liberty Steel empire, including steelworks in South Yorkshire and Australia.
The UK's Serious Fraud Office said in 2021 it was investigating suspected fraud, fraudulent trading, and money laundering related to the financing and conduct of businesses within GFG, including its financing arrangements with Greensill Capital (UK). Gupta and GFG have denied any wrongdoing.
