{"id":366102,"date":"2025-08-23T01:51:12","date_gmt":"2025-08-23T01:51:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/366102\/"},"modified":"2025-08-23T01:51:12","modified_gmt":"2025-08-23T01:51:12","slug":"hopelessly-insolvent-how-saviour-of-steel-sanjeev-guptas-global-empire-unravelled-steel-industry","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/366102\/","title":{"rendered":"\u2018Hopelessly insolvent\u2019: how \u2018saviour of steel\u2019 Sanjeev Gupta\u2019s global empire unravelled | Steel industry"},"content":{"rendered":"

A disparate collection of steelworks in Australia, the UK, Romania and the Czech Republic at the start of the year had two things in common: they were part of the metals empire of Sanjeev Gupta<\/a>, and they had fallen silent.<\/p>\n

The idling plants were emblematic of the tycoon\u2019s struggles. Born in India before starting a commodities trading business at university, Gupta was once nicknamed the \u201csaviour of steel\u201d for his plans to turn around struggling plants. Yet things looked very different this week, as he finally lost control of one of his key UK businesses<\/a>.<\/p>\n

London\u2019s high court ruled on Thursday that Speciality Steel UK (SSUK), a key operating subsidiary, should enter compulsory liquidation as it was \u201chopelessly insolvent\u201d, with debts of several hundred million pounds but only \u00a3650,000 in its account. As soon as the hearing ended, government-appointed special managers present at the court met executives to discuss taking control of steel plants in South Yorkshire and ensuring 1,450 people are paid salaries<\/a>.<\/p>\n

Gupta did not witness the SSUK liquidation in person; instead he remained in Sydney, according to his company. However, Jeffrey Kabel, the Liberty Steel executive at court, insisted that Gupta was \u201csad\u201d, but also that he was not done yet. Gupta will try to buy back SSUK \u2013 which has operations in Rotherham and Stocksbridge in South Yorkshire<\/a> \u2013 from insolvency, Kabel said, claiming that Liberty had the backing of the investment manager BlackRock.<\/p>\n

Meanwhile, the rest of Gupta\u2019s operations \u2013 steel and aluminium works in Scotland, Wales, England, and Australia \u2013 under the informal Gupta Family Group (GFG) Alliance banner, will be \u201cexactly the same\u201d, Kabel said. \u201cWe will continue to operate those and invest in them.\u201d<\/p>\n

Sanjeev Gupta. Photograph: Ben Stansall\/AFP\/Getty Images<\/p>\n

Yet the court proceedings and workers around the world present a picture of an industrialist running out of time and money, with creditors and worried governments closing in, and production slumping or stopping completely. An investigation by the UK\u2019s Serious Fraud Office is ongoing.<\/p>\n

Saviour of steel?<\/p>\n

Gupta started trading commodities from his student room at the University of Cambridge in the early 1990s, earning him expulsion from the halls because of a ban on running a business there. He then began snapping up struggling steel and aluminium plants on the cheap across Europe and Australia \u2013 controlled via Singapore \u2013 and making them part of Liberty Steel.<\/p>\n

Liberty Steel has been catastrophic for European steelworkers in their management of key industrial assets<\/p><\/blockquote>\n

Judith Kirton-Darling, general secretary at IndustriAll<\/p>\n

He also enjoyed the trappings of wealth that came with it: he bought a \u00a342m house in London\u2019s Belgravia<\/a>, a Welsh country estate called Wyelands, a Scottish estate that includes the foothills of Ben Nevis, a waterfront property in Sydney, a 31-metre yacht, and a private jet adorned with the GFG logo and the tail sign M-ETAL. He lists his country of residence as the United Arab Emirates, where he owns another villa.<\/p>\n

Yet since the collapse in 2021 of Greensill Capital<\/a>, his key lender, Gupta\u2019s businesses have been scrambling to find new financing and to renegotiate debts in a desperate effort to retain control. Promised investments in new green technologies have not materialised, and much-vaunted turnaround plans have stuttered.<\/p>\n

The global steel industry has suffered from a glut of Chinese production, and slumping demand, while Donald Trump\u2019s tariff war has created uncertainty.<\/p>\n

Gupta had already lost control of several companies. One of the first things government-appointed administrators noticed in February after taking control of his steel plant in the Australian port city of Whyalla<\/a> was that the traffic lights for vehicles entering the site were not working, potentially compromising safety.<\/p>\n

There was also just three days\u2019 worth of the crucial steelmaking material, coking coal, and a long list of required repairs and maintenance.<\/p>\n

Sanjeev Gupta (front left) and South Australia\u2019s Liberal leader, Steven Marshall, in Whyalla in 2017 mark GFG\u2019s purchase of the mining and steel group Arrium. Photograph: David Mariuz\/AAP<\/p>\n

The lead administrator, Sebastian Hams, at KordaMentha, described the dire levels of working capital at the steelmaker, formerly owned by the GFG Alliance entity OneSteel Manufacturing, as \u201cquite scary\u201d.<\/p>\n

The steelworks was put into administration after the South Australian government, which was also a creditor, lost confidence in Gupta\u2019s ability to deliver on promises to reinvigorate what is one of only two big integrated steel projects in Australia, and the only local manufacturer of rail.<\/p>\n

When administrators moved in, the steelworks was found to have racked up more than $A1.3bn (\u00a3630m) in debts, including unpaid employee entitlements.<\/p>\n

GFG says there was no mismanagement involved, and that it invested heavily. Rather, it argues that steel making globally is suffering amid a difficult trading environment.<\/p>\n

The state and federal governments are providing a $A2.4bn support package to ensure the steelworks keep operating during administration and that workers are paid. There is also financial support for the next owner to upgrade the facility.<\/p>\n

Similar stories are playing out elsewhere. In the Czech Republic, GFG Alliance reportedly sold Liberty Ostrava for about \u00a3100m<\/a> to a fund controlled by a former interior minister. In Romania, Liberty Gala\u021bi staved off bankruptcy after a majority of creditors this month agreed to restructure debts<\/a> reported to be worth 4.7bn lei (\u00a3806m). Steelworks in Belgium, Hungary, Luxembourg and Poland have also been declared bankrupt within the last year, with governments scrambling to find new buyers.<\/p>\n

Judith Kirton-Darling, the general secretary at IndustriAll, a federation of unions including several representing Liberty workers, said: \u201cLiberty Steel has been catastrophic for European steelworkers across the continent in their management of key industrial assets. The current steel market is volatile because of geopolitical tensions and massive structural overcapacity especially in Asia, but this doesn\u2019t explain what has gone wrong in this company.<\/p>\n

\u201cWorkers have long called for government to step in and ensure new owners of these industrial sites but their mismanagement and underinvestment by Liberty Steel over years has made this difficult. Thousands of jobs have already been lost.\u201d<\/p>\n

Fraud investigation<\/p>\n

A shadow hanging over GFG\u2019s efforts to refinance all of its companies has been an investigation into it by the UK\u2019s Serious Fraud Office<\/a>. The SFO made its investigation public in 2021, and attended Liberty Steel offices in April 2022 to take away documents; it has not issued any update since.<\/p>\n

However, there have been other indications of fraud concerns. A 2018 private investigator\u2019s report prepared for bankers at Credit Suisse, the main lender to Greensill, said that Liberty and Gupta were a \u201cclear participant\u201d in a multibillion-dollar fraud because many purported trades were \u201csimply fake\u201d, according to a copy quoted by Bloomberg<\/a>. The Financial Times has separately reported on documents that purported to show GFG sold products to companies who denied having done business with the steel group.<\/p>\n

A lawyer for GFG Alliance said that the group \u201ccategorically\u201d denied any wrongdoing to Bloomberg. Gupta wrote in a 2021 letter<\/a> to the Financial Times: \u201cI\u2019d like to make clear that I refute any suggestion of wrongdoing.\u201d<\/p>\n

Other bankers within Credit Suisse ignored the concerns, and continued to lend to Greensill; Greensill\u2019s collapse contributed to Credit Suisse\u2019s own fall and purchase by its rival, UBS. UBS, which declined to comment, is now the lead creditor hoping that administrators for Greensill Capital will recover their money from Liberty Steel companies through courts across the world.<\/p>\n

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Running out of road<\/p>\n

While the SFO investigation continues, the various insolvency proceedings have given a rare window into Gupta\u2019s scramble to find money.<\/p>\n

One recurring Gupta tactic to get through difficulties has been to shift money between companies to cover temporary shortfalls. However, that strategy may have run out of road. Across the tangled web of companies that form part of the GFG Alliance, at least 15 companies in nine countries are in insolvency proceedings, the high court heard.<\/p>\n

Take Liberty\u2019s relatively small 140-person operation in Hartlepool, northern England, making pipes for oil and gas \u2013 and potentially hydrogen. HM Revenue and Customs this month filed a separate winding-up petition over allegedly unpaid tax<\/a> (although Liberty Steel said that the tax has now been paid). Accounts for the Hartlepool business are three and a half years late, and Gupta faces prosecution in a November hearing over the failure to file accounts for it<\/a> and for other companies.<\/p>\n

The last published accounts suggested that the company is dependent on its Singapore parent, Liberty House Group (LHG), to continue as a going concern. Yet LHG was placed into administration in Singapore in April over unpaid debts to ArcelorMittal, a giant steel-producing rival.<\/p>\n

A judgment<\/a> from that case revealed how Gupta tried to retain control of Liberty House: he said he would \u201cmonetise\u201d another asset, the Tahmoor coalmine in Australia. That would free up $42.5m that could be returned to creditors, including ArcelorMittal and the Greensill creditors \u2013 despite Gupta owing 100 times that, about $4.2bn.<\/p>\n

The Singaporean judge appeared unimpressed with the suggestion, writing: \u201cMr Gupta was proposing to raise funds from entities he ultimately owned and controlled to enable the company to discharge its debts entirely by paying one cent to the dollar, while retaining (beneficial) ownership and control of the company and the group\u201d.<\/p>\n

Instead, the judge said it was unclear whether Gupta could even come up with the 1% return offered. He put the company into administration, noting a \u201clack of candour\u201d about how it expected to find the money.<\/p>\n

GFG had claimed<\/a> in February that it had reached agreement on commercial terms to settle its Greensill debts; that claim appears to have been wildly optimistic, at best. For SSUK, Gupta had in December proposed to give Greensill creditors \u00a3500,000, compared with \u00a3289m owed. Counsel for the creditors told the high court in London that they \u201chave had enough\u201d of waiting.<\/p>\n

Life after Gupta?<\/p>\n

Eddie Hughes, the South Australian Labor MP whose seat covers Whyalla, said the town is better off without Gupta. (In Australia, Gupta still owns an alloy plant in Tasmania plus InfraBuild, a company making beams with electric arc furnaces in Sydney and Melbourne. Bondholders have insisted on a \u201cringfence around InfraBuild from the rest of GFG\u201d to prevent money flowing out from a business still making significant revenues.)<\/p>\n

\u201cNo one believed that the situation was going to improve while he was that strong presence in Whyalla, and in fact, there was a belief that the place would just be run into the ground,\u201d Hughes said.<\/p>\n

\u201cThere is a real material difference now. There\u2019s still a way to go, but at least that [government] money is being spent on the things that need to be addressed.\u201d<\/p>\n

Whyalla is a once-thriving port city that formerly boasted a profitable steelworks and in-demand shipyard. Its population has ebbed and flowed with its changing fortunes, and the city is now home to a modest 21,000 people. A quarter of the workforce is directly employed by the steelworks, plus another 35% working for it indirectly, according to a government report<\/a>.<\/p>\n

In June, Gupta also lost control of the adjoining port, which had accumulated $A194m of debts, according to administrator, William Buck. Michael Brereton, of William Buck, said the future of the city is intricately linked to a successful sale of the steelworks. Australia\u2019s largest steelmaker, BlueScope, is part of an international consortium considering a takeover<\/a>.<\/p>\n

\u201cSeven years ago, Gupta was hailed as a hero for having stepped in to save the whole business; he\u2019s no longer the hero,\u201d said Brereton. \u201cIf they\u2019re not able to find a purchaser, the [steelmaking] business would get shut down and Whyalla would no longer have a reason to be.\u201d<\/p>\n

A GFG Alliance spokesperson said Gupta\u2019s investments had ensured that \u201cmany GFG businesses survived despite operating losses, and safeguard[ed] thousands of UK jobs which would otherwise be lost.<\/p>\n

Liberty Steel\u2019s site in Rotherham this week. Photograph: Christopher Furlong\/Getty<\/p>\n

\u201cLiberty\u2019s strategy has been to identify underperforming or distressed assets that had latent value and that could be transformed over time to produce or process green steel. Its approach has been to rebuild and reinvigorate these businesses while protecting and generating well-paid local employment in less-advantaged communities across the UK.<\/p>\n

\u201cLiberty has remained committed to this task even while implementing a complex financial restructuring following the collapse of Greensill Capital in 2021, which has affected access to capital at some Liberty operations.<\/p>\n

\u201cLike all steel producers globally, Liberty has been impacted by major challenges from wider market conditions and the costs of decarbonising legacy industrial assets.\u201d<\/p>\n

The workers in the UK, Australia and in other plants across the world that are still part of Gupta\u2019s empire are left with huge questions over their futures, and over whether Gupta can follow through on his many promises, secure the backing of the investors he insists he has lined up, and turn things around.<\/p>\n

For those at SSUK, there was a sense of relief, and some hope that their business will have a future beyond Liberty Steel.<\/p>\n

\u201cI do think in the long run it will be a dawn for a new future,\u201d said one worker. \u201cWe\u2019ve been wanting rid of Gupta for a while.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A disparate collection of steelworks in Australia, the UK, Romania and the Czech Republic at the start of…\n","protected":false},"author":2,"featured_media":366103,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[748,393,4884,12,1144,712,16,15,1764],"class_list":{"0":"post-366102","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-britain","9":"tag-england","10":"tag-great-britain","11":"tag-news","12":"tag-northern-ireland","13":"tag-scotland","14":"tag-uk","15":"tag-united-kingdom","16":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115075578840927220","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/366102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=366102"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/366102\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/366103"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=366102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=366102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=366102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}