How Sanjeev Gupta sold his Green Revolution to British politicians

On a bright afternoon in June 2015, Sanjeev Gupta stood beaming in front of the gathered crowd at the Celtic Manor Resort near Newport. One of the industrialist’s family businesses was the new sponsor of Polo at the Manor, an event seen as a highlight of the Welsh social season.

Gupta was on a roll. The day before, he and his father, PK Gupta, had celebrated the unveiling of the latest addition to the family empire, a coal-fired power station in nearby Uskmouth.

Standing in a group alongside Alun Cairns, Tory MP for Vale of Glamorgan, Gupta set the stage for an alluring vision in which the site would become a hub of renewable energy and supply the nearby steelworks he had acquired two years previously.

The promise to save ailing metallurgical operations and turn them into green businesses fit for the 21st century has been Gupta’s calling card for nearly a decade. This is the one that has proven to be irresistible to politicians of all parties.

Their support and connections – along with government guarantees and grants – helped oil the wheels of a series of acquisitions, earning the 49-year-old the nickname “Savior of Steel” and companies that would eventually span four continents and generate $ 20 billion in revenue.

“At first he was seen as a positive force of nature,” said a person who knows Gupta. “His ambitions were exactly what governments were trying to do: support struggling industries and try to revolutionize them with green energy.”

Those ambitions have now been replaced by efforts to save his empire, which was plunged into crisis last month after the collapse of its main lender, Greensill Capital.

Liberty House Group steel rolling plant in Newport © Chris Ratcliffe / Bloomberg

Greensill’s implosion also brought closer scrutiny of how Gupta built a vast collection of businesses that includes Liberty Steel, Britain’s third-largest producer. It employs 3,000 people and 2,000 more work in Gupta’s energy and engineering business in the UK.

The revelations of suspicious invoices and suggestions for circular transactions now posed uncomfortable questions for politicians and government officials who were eager to back him up.

While the UK government has left open the possibility of giving its steelworks a lifeline, it has rejected its request for a £ 170million bailout, underlining the opaque structure of its GFG alliance.

Invitations to Cardiff

Wales was the focus of the early days of Gupta’s expansion, starting with the purchase of a struggling steel mill in Newport in 2013. For over a year, his company kept around 130 employees. on half pay and allowed them to find work elsewhere before. restarted the unit. His vision of revitalizing industries, often in communities in steep economic decline, was supported.

This support was still in evidence the day after Greensill’s insolvency application on March 8. The previous week, Gupta had written to Ken Skates, the Welsh Minister for the Economy, describing GFG’s difficult situation given the escalating problems at Greensill.

March 9 Mark Drakeford, the Premier of Wales, told the country’s parliament that Gupta had not requested additional funding from the government but had set out the current strong commercial position of Liberty Steel Group and “strengthened GFG’s commitment to Wales. Wales ”.

“What the letter demonstrates, I think, is the close relationship that has existed between the company and the Welsh government, and the confidence that the company wishes to continue to build in its future,” said Drakeford.

Along with efforts to reach out to local communities, GFG courted stakeholders in Wales. Invitations to events at the Principality of Cardiff Stadium were frequent, including one to a Beyoncé concert in June 2018.

Gupta’s offices are adorned with photos of himself with politicians and royalty, including former British Prime Minister Theresa May and Prince Charles, according to people familiar with the matter.

“You can enter any of Sanjeev’s offices and there will be a photo of him with a politician,” one said.

GFG declined to comment for the article.

Two former high-level Welsh ministers have taken on GFG-related roles. Carwyn Jones, the former Welsh Prime Minister who led the decentralized administration between 2009 and 2018, joined GFG’s advisory board last year.

The move earned him a reprimand from the Professional Appointments Advisory Committee (Acoba), which advises on the business roles of former members of government. The committee said its position as an adviser to the GFG was contrary to its previous opinion. He had previously told Jones he could take on a role at Simec, a GFG company, as long as he limited himself to energy advising. Jones has previously rejected the allegation.

Jones’ former colleague Edwina Hart, who met Gupta in his capacity as Welsh Government’s Minister for Economics, Science and Transport, took on a role in the Greensteel Council which had been set up by GFG . Acoba authorized the appointment in October 2016 under certain conditions. The council has since been dissolved.

Carwyn Jones, former Welsh Prime Minister, has joined the GFG advisory board © Dario Pignatelli / Bloomberg

Transparency records show that Gupta’s various businesses in Wales received more than £ 200,000 in government support during the pandemic. The group also received a £ 40,000 infrastructure grant for its Newport steel plant which was initially handed over to its former owner, Mir Steel, shortly before GFG bought it.

Another big supporter of Gupta’s Uskmouth plan was Nigel Adams, MP for Selby and Ainsty, who chaired the all-party parliamentary group on biomass.

The deputy received over £ 20,000 from Simec Uskmouth including £ 16,000 for an auction price and nearly £ 3,000 for a trip to the UAE on energy and biomass, the transparency records show. Gupta donated £ 11,350 in September 2016, according to records. A spokesperson for Adams said “all reportable donations” have been “reported correctly and transparently.” It is understood that none of the donations went to Adams personally.

Adams’ political assistant, Malin Bogue, went to work for GFG in 2018 as a PR although she has since been gone.

Other Westminster figures who have worked for GFG include Katie Perrior, a former Downing Street communications advisor in May, who briefly advised the group in 2017.

Perrior, who now runs iNHouse Communications, said: “I briefly advised GFG Alliance in 2017 and they then became an iNHouse client shortly thereafter. . . After a year, we resigned from the account at our request because we decided that the client was not suitable for our business.

Mark Lancaster, Minister of the Armed Forces from 2017 to 2019, who joined GFG’s advisory board in August 2020, has also been hired by Mark Lancaster. Lancaster had never dealt with GFG before joining the board. depending on clearance he received from Acoba. He could not be reached for comment.

New chapter for Scotland

Gupta’s sales pitch also helped its expansion into Scotland, where the industrialist garnered broad political support, including from Prime Minister Nicola Sturgeon.

GFG’s purchases have preserved jobs and saved significant industrial assets, but their financing has proved controversial, particularly that of Britain’s last aluminum smelter in Lochaber, as well as two nearby hydropower plants acquired in Rio. Tinto in 2016. The deal was backed by a government guarantee worth £. 575m.

The government register of ministerial commitments shows SNP Rural Economy Minister Fergus Ewing dined with Jay Hambro, GFG’s investment director, four times in six months from September 2017 to May 2018. Ewing is facing questions from Labor politicians in Scotland for find out if he broke ministerial rules of conduct at a dinner in June 2017 with Gupta, Hambro and Lex Greensill.

Ewing was not available for comment. The SNP said Ewing’s meetings with Greensill and GFG were “properly taped” in accordance with ministerial rules of engagement.

At the time of the deal with Lochaber, Sturgeon hailed it as a new chapter in Scottish manufacturing. Whatever happens to the Gupta empire, the crisis could ultimately force politicians to implement a sustainable strategy for the British steel industry.

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