Nadhim Zahawi ‘instrumental’ in securing controversial Greensill loans, says steel magnate

Sanjeev Gupta thanked senior minister for help, letter shows

Adam Forrest
Thursday 27 January 2022 18:06
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<p>Education secretary Nadhim Zahawi, formerly a minister at the business department (James Manning/PA)</p>

Education secretary Nadhim Zahawi, formerly a minister at the business department (James Manning/PA)

Steel magnate Sanjeev Gupta wrote to senior minister Nadhim Zahawi to thank him for his “instrumental” role in helping secure controversial loans from Greensill Capital, newly-published details have revealed.

The Gupta Family Group Alliance (GFG) obtained the emergency, government-backed Covid loans during from Greensill – the failed finance firm at the centre of a political scandal about David Cameron’s lobbying activities.

In October 2020 Mr Gupta sent a letter to Mr Zahawi, who was then a minister in the business department, to thank him for his “support” in obtaining the Greensill loans through the British Business Bank, according to a report in the Financial Times.

His letter to the minister – shared with the newspaper following a FOI request – stated: “Since you were personally instrumental in getting the BBB’s approval for Greensill Capital to provide financial assistance … it would be very fitting if you could join us to mark this special moment that provides relief to thousands of workers.”

The Department for Business, Energy and Industrial Strategy (BEIS) said it “does not recognise” Mr Gupta’s claim that the minister played a role in facilitating the loan.

A spokesperson for Mr Zahawi – promoted to education secretary last year – also denied he had any involvement in the decision to approve the loan, saying it had been taken independently by the British Business Bank.

The minister’s spokesperson told The Independent: “The claim that Nadhim was instrumental in securing approval is little more than flattery from GFG in an overwritten letter from their PR team. He did not respond to the letter, or attend the event.”

The information released under FOI showed that a text exchange or phone call between Mr Gupta and Mr Zahawi had taken place “at an unknown date” and was related to “Covid assistance”, according to the FT report.

The business department said details showed the minister had explained to Mr Gupta that “requests would need to be directed through BEIS officials”.

A spokesperson for BEIS said: “The department does not recognise the assertion made in Mr Gupta’s letter that Nadhim Zahawi played a role in securing the bank’s approval to accredit Greensill Capital.”

The department pointed to a recent National Audit Office investigation into Greensill’s collapse, which found that the British Business Bank operated the loan accreditation process completely independently of government.

A spokesperson for Mr Zahawi said: “The government was not involved in the decision to accredit Greensill. The decision was taken independently by the British Business Bank, in accordance with their usual procedures.

“GFG’s request for assistance was referred to Nadhim by their local Labour MP, and Nadhim explained to Sanjeev Gupta that requests would need to be directed through BEIS officials.”

The Serious Fraud Office (SFO) announced last May that said it was investigating suspected fraudulent trading and money laundering at companies within GFG. The SFO said investigators would be probing the financing arrangements with Greensill.

Mr Cameron came under scrutiny over his close communication with ministers and Whitehall officials on behalf of Greensill, following its collapse last March.

The former prime minister admitted he should have communicated with the government through “formal channels”.

The Independent contacted GFG, but the group declined to comment.

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