Four Gupta steel firms face winding up orders

Winding up petitions have been issued against four companies owned by metals tycoon Sanjeev Gupta.

Court records revealed one of the firms included Speciality Steel UK Limited, a division of Liberty Steel, which employs about 2,000 people in England.

Three other firms, Liberty Pipes, Liberty Performance Steels and Liberty Merchant Bar, also had petitions against them.

Court documents show the four companies owe HM Revenue & Customs (HMRC) £26.3m.

Mr Gupta's GFG Alliance, which owns the businesses, was forced into a financial restructuring last year. This happened because its key lender, Greensill Capital, collapsed.

Since then it has been racing to shore up its finances under growing pressure from creditors and the tax authorities.

Speciality Steel UK Limited, which supplies the aerospace and oil and gas sectors, has sites in Stocksbridge and Rotherham.

A winding up petition is a form of legal action taken by a creditor against a company that owes them money. If the company is deemed to be insolvent, an official receiver will be appointed to liquidate the company.

Speciality Steel's case is not expected to take place until late March. It is unclear at what stage the petitions are against the other three companies facing legal action.

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A spokesman for Mr Gupta's GFG Alliance said: "Our priority has been to protect thousands of jobs in the UK.

"We are committed to repaying all our creditors and continue to work with all stakeholders around the UK to create a sustainable future for our businesses following the collapse of Greensill Capital."

The Community, Unite and GMB unions, who represent the steel industry, said in a joint statement: "This action by HMRC threatens thousands of jobs and is a devastating blow to our members and their families. Liberty Steel is a strategically important business, crucial to delivering net zero, and under no circumstances can our plants be allowed to close."

A spokesperson for HMRC said: "We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances."

'Critical stage'

GFG Alliance said it was operating against a "very challenging" backdrop, as record high energy prices drove up its overheads.

It added that it was in continuous dialogue with its creditors, including HMRC, to find an "amicable solution" that was in the best interest of all stakeholders.

"Short term actions that risk destabilising these efforts are not in anyone's interest, and undermine creditor recovery at a critical stage in our debt restructuring efforts that seek to secure the future of our businesses," said a spokesman for GFG.

Community, Unite and GMB called on GFG and HMRC "to get back round the table and hammer out a deal that provides space for the company to refinance".

"The best route to protect jobs and repay HMRC and other creditors would be to enable the business to continue to trade," they said.

'National assets'

Steel producers have expressed concerns in recent months over the impact of soaring energy costs on the UK sector, which the industry says puts it at a disadvantage to global competitors.

"Lots of countries around the world are supporting their steel sectors, but in the UK the industry is on its own", said Chris McDonald, a former executive at Tata Steel who now runs the Materials Processing Institute.

"In France, the industry is supported with energy subsidies and trade protections. In Germany, heavy energy users in industry get big rebates."

He said specialist UK steel products were in demand and must be supported.

"The steelworks in Rotherham and Stocksbridge are important national assets and if the company that runs them can't continue to operate, then we need to find a way to enable the asset to continue beyond that," said Mr McDonald.

"The government have done that before with British Steel for a period of time, and of course we do it all the time with our railways."

Sanjeev Gupta and his family own GFG Alliance

A spokesperson for the Department of Business, Energy & Industrial Strategy said: "The government is closely monitoring developments around Liberty Steel and continues to engage closely with the company."

They added: "As always, we stand ready to support their dedicated employees and their families affected by any developments.

"We have provided extensive support to the steel sector as a whole to help with the costs of electricity and are working with them to support their low carbon transition."

Meanwhile, earlier on Thursday the Financial Reporting Council announced it was investigating HW Fisher, the auditor to Liberty Commodities which is another of Mr Gupta's businesses.

The accounting watchdog said the probe concerned HW Fisher's audit of Liberty Commodities' financial statements for the year to 31 March 2020.

GFG Alliance, which is a collection of businesses and investments owned by Mr Gupta and his family, has been under investigation by the Serious Fraud Office since May 2021.

The agency said it was investigating "suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance".