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14 November 2023

The Greensill scandal is far from over

Criminal investigations and court cases could produce embarrassing details about David Cameron’s involvement in the disgraced finance firm.

By Duncan Mavin

David Cameron’s return to the Conservative front bench yesterday came as a surprise to most people. For anyone who understands his role in the Greensill Capital scandal, it is particularly shocking, because this is a scandal that is far from over. Greensill is still the focus of multiple criminal investigations, inquiries by British authorities and legal proceedings which relate not only to Cameron’s past as a lobbyist for the company but also to his new role as Foreign Secretary.

The supply-chain finance company was founded by Lex Greensill, an Australian businessman. He was an adviser to the Cameron government and even carried a 10 Downing Street business card after Cameron appointed him a Crown Representative in 2014. In 2018 Cameron became a highly paid employee of the company, in which he was also a shareholder, before it went bust in 2021 leaving investors facing billions of pounds in losses.

Cameron has never admitted quite how much he was paid for his work at Greensill, but his salary and bonus certainly amounted to well over £1m per year. He also cashed out on stock option-type compensation that bumped his overall package to several million pounds. His return to public life is sure to raise questions yet again about how much he made off with while investors in Greensill’s duff assets lost out.

Lex Greensill has now been named as a suspect in a criminal case in Switzerland alongside a handful of Swiss bankers. His close connection to Cameron could come under scrutiny as details of that investigation emerge. If the Swiss court were to make an extradition request for Greensill, that request would go to the Home Secretary, but the Foreign Office is also closely involved in extradition treaties and processes; it was Dominic Raab who as foreign secretary suspended the UK’s extradition treaty with Hong Kong. The idea that Cameron could be consulted on whether to extradite his former boss has the potential to look very bad indeed.

Nor is Switzerland the only country conducting a criminal investigation relating to Greensill. In Germany financial regulators are investigated the loss of hundreds of millions of dollars deposited by local councils in a Greensill-owned bank. Again, it must be asked how seriously German diplomats will take our new Foreign Secretary if they are aware that the company he worked for is being pursued by their courts.

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[See also: The Tory right’s divided tribes]

Authorities in the UK are also still investigating Greensill. Last month the head of enforcement at the Financial Conduct Authority, writing to the Treasury Select Committee, cited “a number of allegations… regarding the circumstances of Greensill’s failure, some of which are potentially criminal in nature”. The letter didn’t go into further details “so as not to prejudice… ongoing investigations”.

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Meanwhile, the Serious Fraud Office and the Insolvency Agency are looking into aspects of the Greensill case. The Insolvency Agency is due to report its findings within a few months. Each of these investigations has the potential to deliver damaging revelations about the company and, by association, about Cameron as a former senior adviser.

Cameron was not just an employee of a failed company that made some bad bets: he lobbied the most powerful people in the country (including the then chancellor, Rishi Sunak) on Greensill’s behalf while it breached government rules. In 2020 Cameron texted and called Sunak personally to appeal for Greensill to be allowed to extend large loans that would be government-backed under the Covid Corporate Financing Facility. The request was ultimately turned down, and Greensill was supposedly limited to a £50m cap on the loans it could make to any one company. Nevertheless, Greensill extended about £400m pounds in government-backed bailout loans to companies run by the long-time Greensill associate and steel magnate Sanjeev Gupta.

Cameron was cleared of any wrongdoing by a parliamentary inquiry into his lobbying, but the dozens of texts and WhatsApp messages the former PM sent to his erstwhile colleagues are a potential source of ridicule. They will surely be rolled out again in the coming days and weeks.

There are also several multi-billion pound lawsuits, in the UK and around the world, aimed at recovering the missing money. These lawsuits, involving banks and insurance companies that became embroiled in Greensill’s business, are likely to drag on for years, and they will call witnesses and demand documents and evidence. One of the biggest cases, in Australia, focuses on a small Australian insurance broker that Cameron himself visited during his time at Greensill. We could be treated to the spectacle of our Foreign Secretary being called upon to deliver testimony.

No one is suggesting Cameron knew about the worst conduct at Greensill. My reporting for Pyramid of Lies, the book I wrote about the affair, suggests that only a tiny handful of very senior people at the firm knew what Lex Greensill was really up to or understood how precarious the firm’s position had become. But this, too, reflects on Cameron’s suitability for office – he was happy to take the rewards of working for his former adviser, without taking care to understand the situation in which he was becoming embroiled.

[See also: David Cameron is “a poster boy for elite capture by Beijing”]

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