Nadhim Zahawi was ‘instrumental’ in securing Greensill loans approval, says Gupta

Sanjeev Gupta wrote to senior authorities minister Nadhim Zahawi thanking him for his “personally instrumental” position in facilitating taxpayer-backed loans from Greensill Capital that are actually topic to a fraud investigation.

Greensill, a monetary agency whose collapse final 12 months sparked a lobbying scandal that ensnared former prime minister David Cameron, supplied £400m of government-backed loans to entities linked to GFG Alliance, the metals group run by Gupta. GFG is now being investigated by the Critical Fraud Workplace.

Greensill was in a position to present these loans as a result of it received approval from the British Enterprise Financial institution in 2020. The state-owned financial institution has now suspended the federal government ensures backing the loans, amid issues they breached the phrases of the Covid-relief programme, which forbade Greensill from lending greater than £50m to any single firm.

On October 5 2020, Gupta despatched a letter to Zahawi, a Conservative politician who on the time was a minister within the enterprise division (BEIS), thanking him for his “assist” serving to Greensill safe the loans.

“Because you had been personally instrumental in getting the BBB’s approval for Greensill Capital to offer monetary help underneath the CLBILS programme, it might be very becoming if you happen to may be a part of us to mark this particular second that gives aid to hundreds of staff,” Gupta wrote to Zahawi, inviting him to a “small gathering” at his firm’s Rotherham steelworks.

Zahawi, who was promoted to training secretary in an autumn reshuffle, is assumed more likely to run for the Tory management if prime minister Boris Johnson is pressured out by MPs over “partygate”.

The letter was despatched days earlier than the Monetary Instances revealed that a number of entities linked to Gupta had been drawing on a number of taxpayer-backed loans by means of Greensill. A proper investigation was launched days later into the loans, most of which had been supplied in September 2020.

BEIS mentioned: “The Division doesn’t recognise the assertion made in Mr Gupta’s letter that Nadhim Zahawi performed a task in securing the Financial institution’s approval to accredit Greensill Capital.”

GFG declined to remark.

The letter was disclosed in response to a Freedom Of Data request lodged by the FT final summer time. The FOI response from BEIS acknowledged that Zahawi “didn’t reply to the letter, nor did he make any subsequent go to to a GFG Alliance web site”.

The FOI additionally revealed that “a textual content change or telephone name between Sanjeev Gupta and Nadhim Zahawi happened at an unknown date” in relation to “Covid help”. Within the FOI response, BEIS disclosed that there “was now not an digital file of the communication saved on the machine utilized by Nadhim Zahawi, which was his private cell phone”.

Nevertheless, in line with “data held in regards to the communication” at BEIS, the minister defined to the metal baron that “requests would should be directed by means of BEIS officers.”

Cameron earned hundreds of thousands of kilos as a boardroom adviser to Greensill, the lending start-up based by Australian banker Lex Greensill. Cameron final 12 months disclosed a sequence of textual content messages lobbying ministers and civil servants throughout authorities to present his employer approval at hand out Covid loans.

In June 2020, Cameron texted Zahawi: “Lex Greensill . . . says you might be being v useful over HMT and CBILS programme”, in line with the previous prime minister’s disclosures to the Treasury choose committee, which didn’t embrace a response from Zahawi.

BEIS in April final 12 months instructed the FT it didn’t maintain any details about the textual content change between Zahawi and Cameron. The division later admitted to The Instances newspaper that it thought-about deleted communications as not held.

A report from a parliamentary committee revealed final 12 months revealed that when the BBB challenged Greensill over its extreme lending to Gupta’s metals empire, the finance agency mentioned it had acquired “political steers” that its assist for the metal business was welcome. The report famous that BEIS was “unable to clarify the supply of this perceived assist”. 

The UK’s SFO final 12 months launched an investigation into suspected fraud, fraudulent buying and selling and cash laundering at Gupta’s metals empire, inflicting talks over a rescue financing deal to break down.

GFG has beforehand denied wrongdoing and pledged to co-operate absolutely with the SFO probe.

Zahawi didn’t instantly reply to a request for remark.