A senior executive at Liberty Steel UK, an arm of Sanjeev Gupta’s GFG Alliance, has professed ignorance about the exact state of the company’s finances under sustained questioning by MPs.
Anton Krull, chief financial officer, was unable to answer detailed questions about the viability of the company’s operations including the extent of the government’s support to Liberty Steel during the pandemic.
Speaking to MPs on the business, energy and industrial strategy select committee on Tuesday, Krull said that despite being CFO, his remit “does not extend to the balance sheet in terms of the capital structure”.
The testimony from Krull, as well as from Jon Bolton, a former chief executive of Liberty Steel who is now a member of GFG’s global advisory board, underlines the complex structure of Gupta’s sprawling metals conglomerate and the concentration of power in the hands of the industrialist and few key lieutenants.
Even with revenues of $20bn, GFG has remained a loose collection of separate businesses and does not publish consolidated accounts.
The UK government in March rejected a plea by Gupta for a £170m bailout, citing concerns over the opaque nature of the group. Gupta has been looking to refinance GFG since the collapse of its main lender, Greensill Capital in March. The group is also the subject of a probe by the Serious Fraud Office. It has denied wrongdoing and said it is co-operating.
Richard Fuller, Tory MP for North East Bedfordshire, said the testimony from the executives had only “reinforced what the secretary of state said about how opaque the business is”, adding: “all roads lead to Sanjeev”.
“It is totally unacceptable when so many issues around the viability of the business relate to financial matters at GFG that they sent two people who were patently incapable — for good reasons — of answering even the most basic of questions,” he said.
Concerns have been mounting about the fate of Liberty Steel’s British plants. The company is the UK’s third-largest producer, employing about 3,000 people across the country.
Krull, who joined Liberty Steel UK two months ago, previously worked at a South African aluminium producer.
In a statement, GFG said it had made “very clear” to the committee that Krull was “very new into the role, was focused on securing the UK business’s future and would be unable to answer any questions on GFG Alliance’s corporate financing”.
Krull told MPs that while he reported to the chief executive of Liberty Steel UK, a separate management team was responsible for the UK business as a whole.
He said that he was not part of ongoing attempts to refinance parts of the GFG group and could therefore not comment on the capital structure of its UK steel operations.
“My role is really to assist the businesses to produce strategic business plans and forecasts. Our role has not been in trying to unpack the past funding and financing,” he added.
Asked if directors had taken advice on whether the businesses were trading while insolvent — an offence under UK insolvency law — Krull said they had “taken advice around trading” and provided “operational instructions and parameters in terms of which we operate”.
“At our level we operate a robust process of cash management and reporting. We provide clear visibility to the directors to enable them to make appropriate decisions around trading.”
Bolton said “a lot of business decisions were held centrally” and that Gupta was “deemed the prime mover for the strategy”.
He said the advisory board was a “relatively recent addition”. It had met three or four times since being formed but meetings in recent months had been limited to 30 minutes to hear a statement from Gupta. Bolton also pointed out that he had been due to take part in a previous evidence session focused more broadly on the steel industry.