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The UK is being urged to deepen its investigation into government-linked lending and supply chain finance (SCF) facilities provided by Greensill, as details emerge of the collapsed financier’s deep ties to Westminster.

The Cabinet Office announced late on April 12 that a review was to be launched into the development and use of SCF programmes within government, and “especially the role of Lex Greensill and Greensill Capital”.

London-based Greensill – which collapsed into insolvency in March and faces criticism over its controversial high-yield lending model – was involved in multiple public sector financing schemes, including an early payment facility for health workers and a working capital programme for pharmacies.

It had also been approved as an accredited lender under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), an emergency scheme that let Greensill provide government-backed finance of up to £50mn to larger firms facing working capital shortages.

The government’s review into SCF follows accusations of cronyism, after it emerged former Prime Minister David Cameron – an advisor at Greensill since 2018 – had lobbied current government officials for wider access to Covid-19 support schemes.

But fielding questions from MPs on Tuesday, London minister Paul Scully argued that because those lobbying attempts were ultimately unsuccessful, it shows “the system has worked”.

Scully added that the decision to approve Greensill as a lender under CLBILS was made solely by the British Business Bank (BBB), which administered the scheme.

He confirmed that the BBB is currently investigating Greensill’s compliance with scheme rules, understood to be in relation to loans to GFG Alliance companies, but said: “I am not aware of any communication between ministers and the British Business Bank about the accreditation of Greensill, which was made independently of government.”

A BBB spokesperson tells GTR its investment committee “makes independent decisions on lender accreditations for [its] schemes” and informs government stakeholders including HM Treasury.

Similarly, health secretary Matt Hancock denied that the government had any role in approving a Greensill-run early payment service for NHS workers, which was launched in March last year.

“Ministers were not involved in the decision by NHS Shared Business Services to facilitate the provision of salary advances in pilot schemes,” he said, adding that details of a “social meeting” he attended with the company’s founder Lex Greensill, organised by Cameron, was “reported to officials in the normal way”.

Greensill also formed a partnership with thousands of pharmacies across England in July last year, using artificial intelligence to predict the value of prescriptions filled and provide short-term loans to cover the upfront cost.

At the time, its vice-chairman Bill Crothers said the payments would be provided “at ultra-low rates”.

 

Independent review

Despite efforts to downplay links between Greensill and Westminster, opposition parties and campaign groups have raised concerns over the government’s proposed investigation into its use of SCF schemes.

One concern is that fresh links between Greensill and the government are continuing to emerge. Alex Chisholm, chief operating officer of the UK civil service, admitted this week that Crothers took up his post at Greensill in September 2015 while still employed by the government in a senior procurement role.

In a letter to civil service anti-corruption watchdogs, Chisholm said Crothers’ acceptance of an advisory role at Greensill “was agreed via the Cabinet Office internal conflicts of interest policy”. He left his public sector role two months later, in November 2015.

There is also confusion over text messages sent to Cameron by current Chancellor Rishi Sunak, in response to the former prime minister’s efforts to have Greensill integrated into the Bank of England’s Covid Corporate Financing Facility (CCFF) – an emergency programme that purchased short-term debt from investment grade corporates using public money.

Sunak told Cameron those proposals were not possible under CCFF rules, but that he had “pushed the team to an explore [sic] an alternative with the Bank that might work”, according to copies of the messages published by the government.

Scully was evasive when questioned on that exchange, saying only that “the Chancellor in particular rejected what Greensill actually wanted, so there is no case in that regard”. He did not comment on Greensill’s role in health worker salary or pharmacy purchasing programmes.

The review will be undertaken by Nigel Boardman, a former corporate lawyer whose role as non-executive board member for the government’s Department for Business, Energy and Industrial Strategy (BEIS) will be paused during the probe.

Boardman is tasked with completing the review by the end of June this year.

Spotlight on Corruption, a UK-focused pressure group, says it has “serious concerns that the Boardman investigation announced today by the government lacks sufficient independence from the government, will be insufficiently robust, lacks appropriate transparency and may be too narrow in scope”.

The group says Boardman’s role at BEIS means he is “not fully independent”, and that he “should be supported by an advisory group of former senior judges and standards experts who are independent of – and therefore not compromised by their relationship with – the government”.

The opposition Labour Party also plans to force through an independent parliamentary inquiry into the conduct of Greensill, with shadow chancellor Annelise Dodds vowing “to uncover once and for all the truth behind this scandal”.

Though the Cabinet Office says the Boardman review will address all government SCF schemes, Prime Minister Boris Johnson said on Tuesday: “I don’t think [SCF] is going on at present anywhere in government.”

Greensill declined to comment when contacted by GTR.