It marks a dramatic escalation in the ongoing Serious Fraud Office investigation, which began last May – just days after steel magnate Gupta spruiked a $430 million deal to refinance his Australian operations, including the Whyalla steelworks, after the collapse of his financier Greensill Capital, which entered administration earlier last year.
The SFO, a UK government investigative agency, is probing suspected fraud, fraudulent trading and money laundering at Gupta Family Group [GFG] Alliance companies, as well as their links to Greensill.
The financier’s collapse had prompted fears about Gupta’s future in Whyalla – despite the company’s insistence the operation remains profitable and secure.
In a statement overnight, Australian time, the SFO said it had “stepped up” its investigation into Gupta’s businesses, saying: “On Wednesday 27 April [UK time], teams of SFO investigators across the UK issued notices under Section 2 of the Criminal Justice Act 1987 at addresses linked with Sanjeev Gupta’s GFG Alliance, also known as the Liberty House Group of companies.”
Such notices give the Director of the Serious Fraud Office or a designated person power to require a person or entity to provide information or answer questions during an investigation where they have reasonable grounds to suspect an offence has been committed involving serious or complex fraud or corruption.
The operation was coordinated from the SFO headquarters on Trafalgar Square, with teams attending trading addresses across England, Scotland and Wales and issuing Section 2 notices “to request documents including company balance sheets, annual reports and correspondence related to the SFO’s investigation”.
“Investigators spoke with executives at multiple addresses, who co-operated with the operation,” the office said.
“As the investigation is ongoing, the SFO can provide no further comment.”
In a statement, a GFG Alliance Australia spokesperson insisted the investigation’s enquiries “only relate to some of our businesses in the UK and do not relate to our Australian operations, which continue to perform strongly”.
“We continue to focus on operating safely and delivering our business plans,” they said.
“Last year the Serious Fraud Office in the UK opened an investigation into some of the UK companies in GFG Alliance, and our historic relationship with Greensill Capital… the investigations have moved to the next stage with the issuing of Section 2 Notices for information.”
Sources close to Liberty Steel have conceded that SFO staff attended GFG/Liberty Steel premises but insisted it did not constitute a "raid" but an in-person request for information.
— Simon Jack (@BBCSimonJack) April 27, 2022
The inquiries were reported as a “raid” in UK media, but GFG today instead described “a low-key visit by SFO officials which was an expected step in the process”.
“We continue to deny any suggestion of wrongdoing, and we are cooperating fully with the enquiries to help ensure a swift conclusion,” they said.
SA’s Energy and Mining Minister Tom Koutsantonis said the Malinauskas Government was “monitoring these developments overseas”.
“We have been advised these matters relate to GFG’s UK operations and do not relate to its Australian operations,” he told InDaily in a statement.
“GFG’s Australian operations, including the Whyalla Steelworks, are performing strongly.
“The State Government is not aware of any imminent impact of this investigation on the Whyalla Steelworks.”
Labor leader Peter Malinauskas met with Gupta in February, with the then-Opposition Leader saying a prospective hydrogen hub in Whyalla was “the main topic of conversation”.
Hydrogen, hydrogen, hydrogen.
That was the main topic of conversation last night in my meeting with Sanjeev Gupta, owner of the Whyalla steel works.
Hydrogen production and its use, represents one of the greatest industrial opportunities in the history of our state. pic.twitter.com/jozMSj9ExH
— Peter Malinauskas (@PMalinauskasMP) February 1, 2022
An Opposition spokesman said Labor “would have been briefed on the status of GFG’s financial arrangement after coming into Government” and that the Premier “has a responsibility to protect the interests of South Australian taxpayers”.
In an internal memo published by the BBC, Liberty Steel staff were told the company has “consistently rejected any wrongdoing on our part and pledged to co-operate fully to ensure they can conclude their investigations as quickly as possible”.
“We have in place very strict information and document preservation policies which we implemented prior to the SFO announcement, wrote chief transformation officer Jeff Kabel.
“We appreciate these enquiries can be disruptive and concerning for employees and stakeholders… however we are encouraged that the investigation is now progressing and is moving closer to a conclusion.
“Please rest assured that this does not impact the operation of our companies and we must continue to focus on our business plans and operating safely.”
Sources close to Gupta's Liberty Steel deny the in-person request for information constituted a raid. Here is the internal memo sent to employees. pic.twitter.com/Y5GJ4oSy6c
— Simon Jack (@BBCSimonJack) April 27, 2022
The Financial Times has also reported that French prosecutors visited GFG’s Paris office and an aluminium smelter in Dunkirk earlier this week, questioning executives.
In February, Gupta’s Wyelands Bank declared it had “no viable future” with almost all its loans in default, and would be wound down.
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