Vaughan Gething: 'Due diligence' done on Liberty Steel grant

Sanjeev Gupta's GFG Alliance owns Liberty Steel

An investigation was conducted before Welsh government cash was given to a steel business whose parent company is being probed for suspected fraud and money laundering, Vaughan Gething says.

The economy minister said the Welsh government would however "look again" at the £180,000 given to Liberty Steel if more information came to light.

The Serious Fraud Office (SFO) is investigating Sanjeev Gupta's GFG Alliance, which owns Liberty Steel.

GFG earlier said it could not comment.

It said on Friday: "As these matters are the subject of an SFO investigation we cannot make any further comment."

In a statement on Friday, the SFO said the probe in to Mr Gupta's GFG Alliance is over "suspected fraud, fraudulent trading and money laundering", including its financing arrangements with failed company Greensill Capital UK.

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What is Greensill Capital UK?

Greensill, a major lender to Mr Gupta's business, collapsed in March.

Greensill's business model - called supply chain finance - worked by placing itself between customers and suppliers.

It would immediately pay the invoices that suppliers gave to their customers, meaning those suppliers would not have to wait possibly months for payment.

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The Financial Times has claimed one of Mr Gupta's companies had sent Greensill invoices for business it had supposedly done with four European metal companies.

But those European companies told the newspaper they had not dealt with GFG.

However, GFG said the invoices were for products it expected to perhaps sell in the future and the financial arrangement was common for many of Greensill's clients.

What is Liberty Steel?

Liberty Steel, which falls under the GFG Alliance umbrella, employs around 130 staff at its Newport steel plant, with 50 workers at its site at Tredegar, Blaenau Gwent.

In October, the Welsh government provided the firm's Welsh plants with £181,000 in grants, through its Economic Resilience Fund to help businesses during the pandemic.

The Welsh government also offered Liberty Steel a £600,000 repayable loan in 2016, although the cash was never paid because the project did not go ahead.

Asked on the BBC Politics Wales programme whether the government had ever been concerned about GFG Alliance's financial affairs, Mr Gething said: "We're going to take interest in those investigations and the ongoing conversations between our officials and Liberty Steel.

"I just think it would be wrong for me to try to speculate or add a finger in the wind comment.

"We need to understand what's happening with those investigations and crucially the jobs here in Wales and the opportunities for Wales."

Vaughan Gething took over the role of economy minister earlier this week after the Welsh elections

Asked whether the government had conducted proper due diligence before providing money to Liberty Steel, Mr Gething said: "That's my understanding that we've done proper due diligence on all of the grants we've issued, including these.

"If more information comes to light we'll look again at what's happened.

"But the danger always is that you have events that take place afterwards, information is given afterwards, you then try to say, 'You should have been aware of all of this information'.

"We need to know what's really happening at that time and for open and honest conversations to take place between the company and the Welsh government to understand what is and isn't possible from our point of view and the UK government."

Plaid calls for 'rapid review'

Plaid Cymru has called on Audit Wales to "conduct a rapid review" to ensure the Welsh government "has acted in a proper manner in its dealings with GFG".

Its leader Adam Price MS, said: "Given that GFG Alliance is a major employer in Wales, this investigation raises many questions for the Welsh government.

"There must be full cooperation and transparency on the Welsh government's part to establish as quickly as possible whether it was aware of any allegations of wrongdoing when it awarded Liberty Steel hundreds of thousands of pounds in Covid grants.

"The public must also be told of any representations made on behalf of GFG to the Welsh Government requesting financial support and if so, by whom."

Adam Price of Plaid Cymru has called for a rapid review into the Welsh government's deal with GFG

In March, following Greensill's collapse, First Minister Mark Drakeford said the Welsh government would work alongside Liberty Steel to help "to secure the jobs that it provides".

Mr Gething said he would attend a meeting next week of the UK government's reconvened Steel Council.

"I do really hope we have a more grown-up conversation across all governments in the UK about future for British steel, including, of course, steel produced here in Wales," he added.

Carwyn Jones was accused of breaking the ministerial code in taking a job with GFG Alliance, but has denied any wrongdoing

Former first minister Carwyn Jones is one of GFG Alliance's global advisory board members.

The former Welsh Labour leader was accused of breaching the ministerial code in taking the appointment, although he has denied any wrongdoing.

BBC Wales asked Mr Jones to comment on GFG Alliance's SFO investigation but he declined.