David Cameron has defended his lobbying of UK ministers and officials on behalf of Greensill Capital, insisting that it was to benefit the economy rather than to preserve the value of his stock options in the company.
The former PM, making his first public comments on Greensill since his collapse in March, declined to say how much money he was on track to make from the supply chain finance company before he took office .
Industry figures have told the Financial Times that Cameron owns shares worth nearly 1% of Greensill’s value. At one point, the company was valued at $ 7 billion.
But Cameron told the House of Commons Treasury Select Committee that Greensill’s suggestions of a potential windfall for him were “utter nonsense.” He declined to say what the actual number was, but said he had stock options and received “a generous amount, far more than I earned as Prime Minister”.
He added that he had a “big economic investment in the future of Greensill”.
After three months of discussions, the Treasury decided in mid-2020 that it was not interested in Cameron’s proposals.
Mel Stride, Tory Chairman of the Treasury Committee, said Cameron might have been motivated to “undertake this barrage” of contacts at the start of the coronavirus crisis in the spring of 2020 because he realized his “big money making opportunity.” was threatened ”.
The former prime minister said: “My motivation for contacting the government was that we had a very good idea to give credit to businesses.”
Stride asked if Cameron should have known that Greensill was in trouble when concerns emerged about the business, including in a May 2020 Financial Times Report.
But Cameron said he didn’t realize the company was in serious trouble until December 2020. “I didn’t believe in March or April.. . . there was a risk that Greensill would fall. “
Angela Eagle, a Labor member of the committee, told Cameron that some of her messages to ministers and officials sounded “more like harassment than lobbying”.
But Cameron defended his lobbying, saying Treasury officials did not think it was “inappropriate” given the “economic heart attack” that occurred in the UK at the start of the Covid-19 pandemic.
The reason for his “persistence” was that fintech companies such as Greensill were “not well understood” by most people, he added.
Cameron has confirmed that he regularly attends Greensill board meetings although he is not a director of the company, nor involved in the day-to-day running of the business.
“I attended board meetings, listened to arguments, made contributions, especially on geopolitical issues,” he told MPs. “I have not sat on the credit committee, the risk committee or the audit committee.”
Cameron also tried to gain clients for Greensill and helped build relationships with important clients.
Greensill’s path to collapse began in September 2020 when Tokio Marine, its main insurer, announced it was withdrawing coverage within six months.
Cameron said he was unaware of the move, even though he had attended board meetings and listened to the company’s internal podcast.
The former prime minister acknowledged that Greensill had excessive “client concentration” with GFG, the metallurgical group headed by industrialist Sanjeev Gupta.
He also said that it was “very disturbing” to read a FT report that the companies listed on the Gupta loan documents have denied doing business with GFG.
But Cameron defended Greensill’s practices. “It is not because the company enters the administration, that everything was wrong,” he said. “That’s not to say it was all a giant fraud.”
Cameron said that as prime minister he made rules requiring disclosure of all meetings between ministers and lobbyists – but no texts and phone calls.
In his opening remarks to the committee, Cameron said he did not break the rules, but admitted that “prime ministers are in a different category” in terms of conduct after leaving office.
As such, he erred in lobbying ministers and officials via text message rather than writing an official letter, he said.
Cameron said it was “very depressing” to have worked for a bankrupt company.
He then told the House of Commons public accounts committee that it was former cabinet secretary Jeremy Heywood who brought Greensill to Whitehall in 2011 to advise the government on supply chain finance – which led to the creation of a loan program for pharmacies.
He said he had only met Lex Greensill, the founder of the company, twice before 2016 and had no role in awarding the pharmacy contract to Greensill Capital in 2018. “C is like saying, I benefited from organizing your wedding six years ago because six years later, I married your ex-partner.