French prosecutors launch probe into Sanjeev Gupta's steel empire

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French prosecutors have launched an investigation into Sanjeev Gupta’s business dealings as trouble grows for the steel tycoon.

Liberty Steel, one of Mr Gupta’s companies, has faced intense scrutiny since its key lender, Greensill Capital, collapsed.

The Serious Fraud Office has already launched an investigation into suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of Mr Gupta's GFG Alliance business empire, including its financing arrangements with Greensill.

The firm was also recently criticised by MPs, who said that Mr Gupta’s "high risk financial funding practices" were undermining the long-term viability of the steel industry in the UK.

The report by the Commons business, energy and industrial strategy select committee also called into question the "unusual and… unacceptable" way in which he structured his business empire.

Now, the French authorities have opened an investigation into allegations of misuse of company assets and money laundering by GFG, further piling on pressure to the man once known as the "saviour of steel".

GFG told Reuters news agency in a statement that it was "not aware of any such investigation and refutes any suggestion of wrongdoing in its French operations".

The incident being probed by French prosecutors is the alleged disappearance of a state-backed loan from Greensill to a GFG-owned factory in the west of France, in addition to a deal between GFG and London-listed commodities giant Glencore to refinance an aluminium smelter in Dunkirk.

The details of the probe were first reported by the Financial Times on Sunday.

Liberty came to prominence in the UK when it bought and reopened a number of steel sites between 2015 and 2017 when the wider industry was in crisis.

But the company, which employs 3,000 people in the UK, fell into financial difficulties when its main source of funding, Greensill Capital, collapsed earlier this year.

In May, parent company GFG announced plans to sell seven UK plants, employing 1,500, people as part of a subsequent restructuring plan.

But last month, a £50m cash injection was announced, enabling Liberty to restart production at its plant in Rotherham, which had been closed since the spring.

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