Greensill: £335 million in taxpayer funds is at risk due to “woefully inadequate checks” on a firm.


Greensill: £335 million in taxpayer funds is at risk due to “woefully inadequate checks” on a firm.

Before Greensill Capital collapsed in March, former Prime Minister David Cameron is said to have earned (dollar)10 million (£7.2 million) from his two-and-a-half years of part-time work for the firm.

According to a new report, the Government-owned British Business Bank failed to properly scrutinize collapsed lender Greensill Capital, potentially putting hundreds of millions of pounds of taxpayers’ money at risk.

The Public Accounts Committee (PAC) found that the Bank of England failed to conduct adequate due diligence on Greensill, the finance firm for which former Prime Minister David Cameron lobbied, putting “up to £335 million of taxpayer money at risk.”

The committee questioned why the Bank was “insufficiently curious” about reports that Greensill was on the verge of going bankrupt, and said the lender’s checks were “woefully inadequate.”

The British Business Bank was also chastised for striking the “wrong balance” between “making quick decisions” and “protecting taxpayer interests” during the pandemic.

Greensill was approved as a lender for the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) by the British Business Bank during the pandemic.

Greensill borrowed £400 million under CLBILS, the maximum amount allowed, and £18.5 million under CBILS.

Greensill, on the other hand, declared bankruptcy in March 2021.

Its demise sparked a flurry of inquiries into the financier’s ties to the government and Prime Minister David Cameron.

The saga was the first in a series of renewed calls to outlaw lobbying by MPs and former politicians, and it brought the “revolving door” between politics and business into sharper focus.

Mr Cameron earned (dollar)10 million (£7.2 million) from his two-and-a-half years of part-time work for Greensill before the company collapsed, according to BBC Panorama.

When he cashed in Greensill shares in 2019, the former Conservative prime minister reportedly made (dollar)4.5 million after taxes.

This was in addition to his annual salary of (dollar)1 million as an adviser and a (dollar)700,000 bonus in 2019.

Mr Cameron sent a flurry of WhatsApp messages, texts, and emails to ministers, officials, and the Bank of England earlier this year in an attempt to secure Greensill’s access to government-backed Covid support schemes.

Mr Cameron has claimed that he was unaware of the company’s precarious financial situation when he lobbied for taxpayer support.

The PAC found that “a lack of information-sharing across government” had “once again hampered sound decision-making in the government’s response to the pandemic and allowed Greensill access to taxpayer-funded schemes” in its report, which was released today.

“The British Business Bank only needed to read the papers to be aware of serious questions about Greensill’s lending model, over-exposure to borrowers, and its ethical standards – yet it didn’t really start to delve into those issues until the problems were clear and hundreds of millions of taxpayers’ money was already at risk,” said Labour MP Dame Meg Hillier, chair of the PAC.

“It claimed to be’very surprised’ to learn where these taxpayer-backed loans had gone on its watch, in violation of its own lending and accreditation rules,” according to the report.

“When the British Business Bank accredited Greensill Capital (UK) Limited as a lender under the Covid-19 business support schemes, the National Audit Office (NAO) concluded in July 2021 that the British Business Bank appropriately applied a streamlined version of its established process,” the British Business Bank said.

“The British Business Bank accredited 116 CBILS lenders, 27 CLBILS (Coronavirus Large Business Interruption Loan Scheme) lenders, and 28 BBLS (Bounce Bank Loan Scheme) lenders between March 2020 and March 2021 to provide essential access to finance for more than 1.6 million businesses between March 2020 and March 2021.”

“A more streamlined accreditation process would have resulted in fewer lenders being accredited, and fewer businesses receiving critical emergency funding during the pandemic.”

“The NAO also found that the bank’s post-accreditation monitoring and audit processes, which were designed to do so, quickly identified a potential issue, which was to the bank’s credit.”

“The bank is still looking into Greensill Capital’s possible violations of the CLBILS scheme rules.”

“The government was not involved in the decision to accredit Greensill,” a government spokesperson said.

The British Business Bank made the decision independently, in accordance with their standard procedures.”

Greensill says £335 million in taxpayer funds is at risk because of “woefully inadequate checks” on the firm.

Greensill: £335m of taxpayer money at ‘increased risk’ due to ‘woefully inadequate checks’ on firm

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