Liberty Steel parent remains pressured

Reports out of two different parts of the world indicate United Kingdom-based Liberty Steel and its parent company, the GFG Alliance, continue to face financial pressures more than three years after it was a party to the bankruptcy of the former Greensill Capital.

The 2021 collapse of the bank and financing firm Greensill and GFG’s role in or response to it eventually led to the U.K.’s Serious Fraud Office opening an investigation into GFG that remains ongoing.

The Guardian is among the outlets reporting that several GFG Alliance companies have not filed audited mandatory government statements in that nation.

Also reporting that news is the Australian Financial Review (AFR), which this week published an additional report portraying widespread board director defections from GFG-affiliated companies. The AFR also says its sources indicate vendors of Liberty’s Whyalla steel works in that nation are reporting being behind in payments from the company.

An Oct. 15 AFR report titled “Gupta’s steel empire restructures global boards as troubles mount” portrays the mounting woes of Liberty Steel, the GFG Alliance and its founder, Sanjeev Gupta.

“The international boards at the center of Sanjeev Gupta’s industrial empire are losing high-profile directors and his global advisory panel is entirely defunct, isolating the British steel magnate as his financial troubles mount,” the mid-October report says.

That same report traces Gupta and GFG’s woes back to the 2021 Greensill collapse and refers to legal documents filed in the U.K. claiming GFG Alliance still owes $870 million to Greensill creditors.

AFR cites global accounting firm Grant Thornton, an administrator of the failed Greensill, indicating it had made no progress in recovering any of the money that was owed despite having signed four agreements in two years.

Late last year, legal filings pointed to more money being owed by GFG Alliance and Liberty Steel, in this case to Luxembourg-based steel producer ArcelorMittal.

That case stems from Liberty Steel’s acquisition of former ArcelorMittal mills in the Czech Republic, Italy, Macedonia and Romania.

The most recent financial question mark concerns statutory annual filings with the U.K. government entity Companies House. According to The Guardian, that agency has filed prosecution documents targeting GFG Alliance for failing to file accounts for more than 70 companies listed in Britain.

In its reports, GFG Alliance claims it has filed unaudited reports with Companies House that the agency is not accepting. That problem, AFR says, stems in part from the GFG Alliance’s inability to maintain an auditing firm.

In addition to struggling to maintain auditors, in its mid-October report, AFR says the GFG Alliance is having similar difficulties maintaining members of a global advisory board Sanjeev Gupta had previously formed as well as board directors at its Liberty Steel Holdings company in Singapore.

A GFG Alliance spokesperson contacted by AFR says, “We are reducing the Liberty Steel board to make it leaner and more focused on macro issues affecting the group.”