Sanjeev Gupta struggles to back GFG alliance in double legal battle

Troubled metal tycoon Sanjeev Gupta fought a legal battle on two fronts on Tuesday in an attempt to back his GFG alliance group.

In a rare public appearance, Gupta testified in a Liege court in an attempt to overturn an order to liquidate his company’s operations in Liege.

Meanwhile, in London, a separate closed-door hearing began preliminary hearings on creditors’ winding-up applications against three GFG companies.

The two hearings highlighted the scale of the challenge facing industrialists who have been struggling to refinance GFG since the collapse of its main lender Greensill Capital in March last year.

GFG is also being investigated by UK and French authorities for alleged fraud and money laundering, both of which have intensified their investigation in recent weeks.

Gupta used his appearance at the Liege Court of Appeal to argue that his company remains “fully committed” to the Liege plant, which operates under GFG’s steel arm Liberty Steel.

Last month, the Liege Commercial Court rejected Liberty Steel’s restructuring plan for its Belgian assets and ordered its Liege company to be liquidated. GFG acquired two plants in Flemalle and Tilleur from ArcelorMittal in 2018, which together employ around 650 people near Liege, and a plant in Dudelanges, Luxembourg factory.

Gupta told Belgian media that the company “has taken all necessary steps to correct the situation”. When asked where the money was coming from, he said: “Within the group, of course.”

Liberty Steel said in a statement that it had “injected fresh capital into two Liege plants” “through a series of intra-group debt-to-equity swaps and a new cash-to-equity injection”. The company claims that the new funding will allow those factories to resume production immediately.

Meanwhile, in another closed session in the Bankruptcy and Companies Court in London, Justice Nicholas Briggs heard arguments over whether three GFG companies should go into winding-up proceedings.

Under interim rules introduced during the pandemic, insolvency cases in the UK will have preliminary hearings to determine whether the company’s troubles are caused by the pandemic or more fundamental problems within the group.

Preliminary hearings are set to conclude on Wednesday, when a judge will decide whether petitions against certain companies should go ahead in a move that could put thousands of steel jobs at risk in politically sensitive parts of Britain.

The case was brought by U.S. investment bank Citigroup as trustee for a Credit Suisse fund that lent more than $1.3 billion to GFG through failed financial firm Greensill Capital.

Citi submits a series of applications In March 2021, proceedings were filed in bankruptcy court in London against some of Gupta’s commodity and industrial businesses.

Under UK law, creditors can apply to the court to close companies that owe them money. To be successful, they must prove that the company cannot pay what they owe, in which case the company’s assets can be sold to pay.

Gupta managed to delay the hearing by more than a year after persuading Credit Suisse to delay the winding-up process.

But according to people familiar with the matter, Swiss bank negotiator He has recently lost confidence that they will be able to reach a settlement with Gupta after his business was raided by police in France and investigators at the UK Serious Fraud Office stepped up their investigation of the group.

This story has been revised to reflect Sanjeev Gupta’s court appearance in Lie, not Antwerp

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