Finance

Greensill had ‘extraordinarily privileged’ relationship with government, review finds

A review into Greensill Capital’s lobbying of politicians has found that former Morgan Stanley banker Lex Greensill “had a privileged – and sometimes extraordinarily privileged – relationship with government”.

The 141 page report into the collapsed supply chain finance firm by former Slaughter and May partner Nigel Boardman raised concerns about potential conflicts of interest between Greensill’s nascent business and his role in government.

Greensill went bust in March after Credit Suisse suspended four funds valued at $10bn which were key to its liquidity, after concerns Greensill loans had become over-exposed to the Gupta Family Group Alliance of firms run by steel magnate Sanjeev Gupta.

READ Greensill scandal spotlights risks of non-bank finance sector

The report published on 22 July also found that former Prime Minister David Cameron “on occasion understated the nature of his relationship with Greensill Capital” when seeking to lobby ministers and civil servants on the company’s behalf.

Ultimately, however, the report concluded that the system for regulating lobbying in the UK is fit for purpose.

“While there are improvements to be made, the current system and those operating within it worked well,” the report said.

READ SFO launches fraud probe into Gupta Family Group and its relationship with Greensill Capital

Ministers and civil servants resisted the “strong methods” Greensill’s representatives, including Cameron and former senior civil servant Bill Crothers, used to try and sell its products to the government, the report found.

The “low take up” of Greensill’s services by government “attests to the fact that ministers and civil servants made the proper analysis of the products being offered to them and did not allow their judgment to be influenced under the pressure being applied by Greensill Capital,” the report said.

To contact the author of this story with feedback or news, email James Booth

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