Gupta’s ring of steel
He’s been hailed as the saviour of British industry but his finances are opaque. So what’s the truth behind...
In the space of a few years, Sanjeev Gupta has emerged from obscurity to become a leading industrialist dubbed the ‘saviour of UK steel’. His sights are now on the steel assets of Europe’s second-largest producer, German giant Thyssenkrupp.
And there are reports that he will make an offer for the ailing Port Talbot steelworks in South Wales, owned by Tata.
His strategy has been buying up struggling factories and promising to return them to profit, transforming the fortunes of former industrial areas in the process.
He has been on a lightning-speed acquisition spree since 2015, taking on businesses in Europe, Australia and the US with more than 35,000 employees. But his burgeoning empire has already raised eyebrows in the City.
There are growing questions around how he has financed his spending binge, the opacity of his businesses’ accounts and his complex, interlinked web of corporate interests. Recent attempts to bolster the credibility of his core steel business by creating a global advisory board of well-respected names – including former First Minister of Wales Carwyn Jones – have come under fire.
The Indian-born magnate’s businesses, which sit under a loose umbrella organisation called the Gupta Family Group (GFG) Alliance, now have an annual turnover of £15bn. His grand plans have won him support from the likes of French
President Emmanuel Macron, Scottish First Minister nicola Sturgeon ( pictured below with Gupta) and even Prince Charles, who appointed him as his personal industrial ambassador. At first glance, Gupta seems a somewhat unlikely candidate for the saviour of the UK steel industry.
The 49-year- old was born in the Punjab and brought to Britain when he was 12, where he was educated at the exclusive St Edmund’s School in Canterbury. Sanjeev Gupta also started young, launching Liberty House as a trading company in 1992 while he was a student at Cambridge.
He spent two decades as a commodities trader before going on to transform Liberty into his flagship steel firm.
He and his wife nicola, his former treasurer who he married in 2008, have three children and own a £4.5m mansion in South Wales called Wyelands.
Gupta was relatively anonymous until 2013, when he bought the ailing Mir Steel plant in newport.
A Leave voter who had expected the country to vote Remain, by late 2016 he was talking about how Brexit could be used to bring about a UK ‘industrial renaissance’.
He unveiled an ambitious strategy which he dubbed ‘greensteel’, in which he argued that the way to save British industry was to have a hand in every part of the supply chain.
Clean energy plants could provide the power that could be used in factories, which would make recycled steel in electric arc furnaces.
These materials would then be made into component parts that could supply other factories making end-products, such as vehicles. In late 2016 he bought a clutch of assets in Scotland from Rio Tinto. The deal also gave him 100,000 acres around the slopes of Ben nevis, turning him at a stroke into one of the UK’s largest private landowners.
He bought a business bank which he renamed Wyelands –after his Welsh estate – aimed at lending to small businesses. The company insists that it operates independently from the GFG Alliance. In early 2017 he bought Tata’s speciality steel business in Rotherham for £100m and its pipe mills in Hartlepool for an undisclosed price. He also began spreading his wings, buying into Australia and north America, and purchasing a slew of European steel plants from ArcelorMittal. Liberty also bid unsuccessfully for British Steel. In January, it axed 355 jobs, about 10pc of its UK workforce, in South Yorkshire and Wales and in June warned more cuts were coming under plans to slash costs by 30pc due to Covid. But quite apart from coronavirus, sceptics have for years questioned how the GFG Alliance – and particularly Liberty – has financed its rapid rate of growth and how much money it can make from taking over distressed or unwanted sites. The GFG Alliance says it is generating billions of pounds every year, but this is impossible for outsiders to verify because it is made up of hundreds of complex entities registered all over the world. Many of these lead to offshore locations such as Singapore and the Channel Islands. The Financial Times has raised questions about financing from Wyelands, which has launched an independent review of its lending practices and financial controls following the report.
Financing company Greensill has provided billions of pounds of financing to the GFG Alliance, sometimes secured against revenues that will not be generated for many years.
Gupta says his companies use a mixture of conventional debt, supply chain financing, equity and other forms of funding.
TO COMBAT criticism of the opaque financing structures he is in the process of consolidating GFG’s steel unit into a single entity. He has also set up a 17member global advisory body for the GFG Alliance – bagging high-profile individuals including Carwyn Jones, former UK Steel chairman Jon Bolton and the former MP Lord Lancaster of Kimbolton for the UK arm of the advisory board.
Jones, former leader of Welsh Labour, was censured for taking up the post by an oversight body that advises on business roles for former government members.
Whether Gupta can appease his critics is yet to be seen – and the debate continues to rage over whether he is an inspired industrialist or riding for a fall.