Steel tycoon Sanjeev Gupta’s GFG alleged to have ‘misappropriated’ funds in Romania
The French government has grounds to believe that Sanjeev’s Gupta’s GFG Alliance has “misappropriated” funds from a steel plant in Romania, according to court documents in a case involving one of the metal magnate’s companies.
Gupta has launched legal action in London in a last-ditch attempt to reclaim a vast aluminium smelter in Dunkirk, northern France, after its takeover by a US private equity firm, American Industrial Partners (AIP). GFG has been under intense financial pressure since the collapse of its main lender, Greensill Capital.
However, filings in the case suggest that legal authorities in France believe laws may have been broken by Gupta’s companies in separate dealings in Romania. GFG is under investigation by the UK’s Serious Fraud Office (SFO) over “suspected fraud, fraudulent trading and money laundering”, and French prosecutors are also investigating, but GFG has not so far faced charges. GFG denied that it has broken any laws.
The smelter, the largest in Europe, is a highly sought-after asset in an important industry for the French government, and it is thought to consume as much as 1% of France’s electricity.
Gupta, an Indian-born, Cambridge-educated commodities trader, bought the smelter from Rio Tinto in December 2018. However, AIP seized control of it in October 2021 after acquiring some of its debt, and the smelter has since become the subject of a bitter legal dispute.
In a filing in response to GFG’s high court action, AIP wrote that its subsidiary, called Lightship, was unable to accept money offered as repayment for one of the GFG loans it held after a warning from the French government on 19 July.
The defence filing said: “Lightship was informed that there were grounds to believe that the funds
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