On a clear June 2015 afternoon, Sanjeev Gupta beamed at the crowd gathered at the Celtic Manor Resort hotel near Newport. One of the industrialist’s family businesses was the new sponsor of Polo at the Manor, an event considered a highlight of the Welsh social season.
Gupta was doing well. The day before, he and his father, PK Gupta, had celebrated the inauguration of the newest addition to the family empire, a coal-fired power plant in nearby Uskmouth.
Standing in a group alongside Alun Cairns, the Conservative Member of Parliament for Vale of Glamorgan, Gupta set the stage for an enticing vision in which the site would become a renewable energy hub and power the adjacent steel mill he acquired two years earlier.
The promise to save tenacious metal businesses and transform them into green companies fit for the 21st century has been Gupta’s calling card for nearly a decade. It is one that has proved irresistible to politicians from across party lines.
Their support and connections – as well as government guarantees and subsidies – helped grease the wheels for a series of acquisitions, earning the 49-year-old the nickname “ savior of steel ” and companies that would eventually span four continents and generate $ 20 billion in revenue.
“He used to be seen as a positive force of nature,” said one person who knows Gupta. “His ambitions were very much in line with what governments were trying to do: support ailing industries and try to revolutionize them with green energy.”
Those ambitions have now been replaced by efforts to save his empire, which went into crisis last month following the collapse of its main lender, Greensill Capital.
Greensill’s implosion has also led to increased attention to how Gupta has built an extensive roster of businesses, including Liberty Steel, Britain’s third largest producer. It employs 3,000 people and a further 2,000 work in Gupta’s UK energy and engineering businesses.
Disclosures of suspicious bills and circular trade suggestions now raise uncomfortable questions for the politicians and government officials eager to support him.
The UK government has left open the option of giving its steel mills a lifeline, but has rejected its request for a £ 170 million bailout, noting the opaque structure of its GFG alliance.
Invitations from Cardiff
Wales was a major focus in the early days of Gupta’s expansion, starting with the purchase of a struggling steel mill in Newport in 2013. For more than a year, his company retained about 130 employees at half the pay and enabled them to find work elsewhere. restart the unit. His vision to revitalize industries, often in communities with severe economic downturns, gained support.
That support was still there the day after Greensill filed for bankruptcy on March 8. The week before, Gupta had written to Ken Skates, the Welsh economics minister, outlining GFG’s predicament given Greensill’s growing troubles.
On March 9, Mark Drakeford, the Prime Minister of Wales, told the country’s parliament that Gupta had not requested additional funding from the government, but outlined the Liberty Steel group’s strong current trading position and “ GFG’s commitment to Wales. had strengthened. ”.
“What the letter shows, I think, is the close relationship that exists between the company and the Welsh Government and the confidence the company wants to continue to build in its future,” said Drakeford.
In addition to efforts to reach out to local communities, GFG wished for stakeholders in Wales. There were regular invitations to events at Cardiff’s Principality Stadium, including one to a Beyoncé concert in June 2018.
Gupta’s offices are adorned with photos of himself depicting politicians and royalty, including former British Prime Minister Theresa May and Prince Charles, according to people familiar with the case.
“You can go into any of Sanjeev’s office and there will be a picture of him with a politician,” said one.
GFG declined to comment on the piece.
Two prominent former Welsh ministers took up positions related to GFG. Carwyn Jones, the former Welsh Prime Minister who headed the decentralized administration between 2009 and 2018, joined GFG’s advisory board last year.
The move earned him a punishment from the Business Appointments Advisory Committee (Acoba), which advises on business roles for former members of the government. The committee said his position as an adviser to GFG was contrary to the earlier advice. It had previously told Jones he could take a role at Simec, a GFG company, as long as it was limited to energy advice. Jones has previously dismissed the allegation.
Jones’s former colleague Edwina Hart, who met Gupta in her capacity as Minister of Economy, Science and Transport in the Welsh Government, took a role on the Greensteel Council set up by GFG. Acoba approved the appointment in October 2016 under certain conditions. The council has since been dissolved.
Transparency records show that the various Gupta businesses in Wales received more than £ 200,000 in government aid during the pandemic. The group was also the beneficiary of a £ 40,000 infrastructure grant for its steel mill in Newport, originally handed over to its previous owner, Mir Steel, shortly before GFG bought it.
Another strong supporter of Gupta’s Uskmouth plan was Nigel Adams, Member of Parliament for Selby and Ainsty, who chaired the all-party parliamentary group for biomass.
The MP has received over £ 20,000 from Simec Uskmouth including £ 16,000 at auction price and nearly £ 3,000 for a trip to the UAE on energy and biomass, transparency records show. According to the records, Gupta donated £ 11,350 in September 2016. A spokesperson for Adams said that “all reportable donations” were properly and transparently reported. Obviously, none of the donations went to Adams personally.
Adams’ political assistant Malin Bogue joined GFG in 2018 in the capacity of public relations, although she has since left.
Other Westminster figures who worked for GFG include Katie Perrior, a former Downing Street communications consultant under May, who briefly advised the group in 2017.
Perrior, who now runs iNHouse Communications, said, “I briefly advised GFG Alliance in 2017 and they became iNHouse customers shortly thereafter. . . After a year, we filed the account at our request because we decided that the client was not a good fit for our company. “
Another recent political recruitment was Mark Lancaster, Secretary of the Armed Forces from 2017 to 2019, who assumed a role on GFG’s advisory board in August 2020. Lancaster had no previous contacts with GFG before joining the board according to the permission he had received from Acoba. He was not available for comment.
New chapter for Scotland
Gupta’s sales pitch also helped its expansion into Scotland, where the industry received broad political support, including from Prime Minister Nicola Sturgeon.
GFG’s acquisitions have saved jobs and saved key industrial assets, but their financing has proven controversial, particularly that of Britain’s last aluminum smelter in Lochaber, along with two nearby hydroelectric plants that were acquired from Rio Tinto in 2016. The deal was backed by a £ 575m government guarantee.
The government’s register of ministerial commitments shows that SNP’s rural economy minister, Fergus Ewing, dined four times in six months with Jay Hambro, GFG’s chief investment officer, from September 2017 to May 2018. reigns at a June 2017 dinner with Gupta, Hambro and Lex Greensill.
Ewing was not available for comment. The SNP said Ewing’s meetings with Greensill and GFG were “properly recorded” in accordance with the rules for ministerial appointments.
At the time of the Lochaber deal, Sturgeon referred to it as a new chapter in Scottish production. Whatever happens to Gupta’s empire, the crisis may finally force politicians to implement a sustainable strategy for Britain’s steel industry.