Taxpayer 'could lose £335m over Greensill's loans'

Taxpayer 'could lose £335m over Greensill's loans'

July 7, 2021

Taxpayer ‘could lose £335m over Greensill’s loans’: Public purse faces possible losses after David Cameron’s finance firm was given access to government-backed Covid loan schemes, watchdog says

  • David Cameron’s firm given access to government-backed Covid loan schemes
  • British Business Bank took ‘at face value’  figures provided by Greensill Capital
  • Started to carry out checks after lender had given out huge amounts of money

Taxpayers could lose £335million after David Cameron’s finance firm was given access to government-backed Covid loan schemes without proper checks being carried out, a watchdog says.

A National Audit Office investigation found that officials at the British Business Bank took ‘at face value’ the figures provided by Greensill Capital and only started to carry out checks weeks after the now-collapsed lender had given out huge amounts of money.

Greensill gave £300million in six loans to companies linked to steel tycoon Sanjeev Gupta on one day, in an alleged breach of lending rules. 

The report gives a detailed account of the attempts by Greensill, founded by Lex Greensill (pictured), to gain accreditation and public money for itself and its customers

Weeks later it was told it could loan no more under the Coronavirus Large Business Interruption Loan Scheme (CLBILS). 

The NAO, the public spending watchdog, also uncovered another angle to the lobbying scandal that has engulfed the Government, former PM Mr Cameron and Greensill, the company he worked for.

Civil servants showed an ‘unusual’ amount of interest in Greensill’s applications for coronavirus support, today’s report reveals. 

They wrote dozens of emails to bank staff demanding updates, as they feared steelworks in the UK would go bust without it.

The report gives a detailed account of the attempts by Greensill, founded by Lex Greensill, to gain accreditation and public money for itself and its customers from government measures designed to protect the economy. 

Mr Cameron lobbied ministers and officials by text.

Greensill lent the maximum amount it could under CLBILS, £400million in eight loans, and another £18.5million under the smaller CBILS scheme.

David Cameron’s finance firm was given access to government-backed Covid loan schemes without proper checks being carried out, a watchdog says

The schemes gave a government guarantee for 80 per cent of the money handed by lenders to businesses suffering in the pandemic. 

It means taxpayers could lose £335million if the borrowing companies are unable to repay the loans.

The Department for Business said: ‘It is perfectly normal – and right – that Government gathers all relevant information when approached for taxpayer funds. 

There is no suggestion that [the department’s] ministers or officials sought to influence the bank’s decision.’

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