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Sanjeev Gupta’s GFG Denies Any Wrongdoing in French Investigation | Steel industry

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Sanjeev Gupta’s business empire has denied wrongdoing in its French operations after revealing it was under investigation by Paris prosecutors.

GFG Alliance, an informal group of metallurgical and energy companies including Liberty Steel, has faced a litany of challenges since the collapse in March of its main lender, Greensill Capital.

The collapse sparked a rush for a new source of funding for Gupta’s businesses, as well as investigations by the UK’s Serious Fraud Office and German regulators.

GFG’s interests range from Liberty, a British steelmaker that employs 3,000 people, to aluminum, mining and energy companies as far as Singapore, the United States and Australia. The group says it employs up to 35,000 people worldwide with a combined annual turnover of £ 15 billion, although it does not produce consolidated accounts.

The Paris prosecutor’s office confirmed on Monday that it had opened its investigation into “various operations within GFG” on July 23 on allegations of “embezzlement of corporate assets” and “money laundering”. The investigation will be conducted by the French Central Office for Combating Corruption and Tax Offenses, a spokesperson said.

A spokesperson for GFG Alliance said: “GFG is not aware of any such investigation and refutes any suggestion of wrongdoing in its operations in France.

A report by UK MPs last week raised a range of concerns about Gupta’s leadership in GFG, including corporate governance, unusual corporate and financing structures, and a series of accounting “red flags”. GFG has denied that Gupta failed to fulfill its obligations as a director, after MPs said the insolvency department should investigate.

GFG’s French assets include the largest primary aluminum smelter in Europe, located in Dunkirk. The foundry is the subject of a dispute with American Industrial Partners, an American company private equity firm that claimed ownership after an alleged payment default by GFG.

The Financial Times, which first reported the existence of the French investigation, said French prosecutors were considering a deal between GFG and commodities firm FTSE 100 Glencore to refinance the foundry, along with a sustained loan. by the government for another factory in Poitou, central France.

The GFG spokesperson said: “There was a trade agreement with Glencore at market rates to ensure stable funding for the company.

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“We respected all the rules and invested 45 million euros [£39m] shareholder funds in downstream French assets, including Poitou, while under our ownership.

Glencore said it has “entered into arm’s length trade agreements with Dunkirk which have been actively negotiated and have been subject to due diligence and review.”

GFG added that there were no outstanding liabilities to an Ascoval plant, which it sold in August to German steel company Stahl-Holding-Saar as Gupta tried to stabilize its group. The French government had loaned 20 million euros in March to work at Ascoval.


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