Calls for an investigation into collapse of Liberty Steel backer in bid to protect Hartlepool jobs

Concerns were raised by MPs in the House of Commons about the business model of Greensill Capital after it entered administration.

It has been suggested Serious Fraud Office (SFO) investigation could be required to examine the circumstances of the collapse.

Labour is pressing the Government to consider nationalising Liberty Steel, which owns 12 UK steel plants and employs 5,000 people, arguing it could offer the best value for money.

Plants include those in Hartlepool – where around 250 jobs are at risk at its Brenda Road site - Rotherham, Stocksbridge, Scunthorpe and Newport.

Conservative MP Richard Fuller, who represents North East Bedfordshire, also told Business Secretary Kwasi Kwarteng: “An acquisition strategy based on supply chain financing arrangements, plus a future receivable derivatives scheme, plus an additional month’s cashflow, plus a liberal mix of state guarantees has the characteristics of a potential Ponzi scheme.

“Has (Mr Kwarteng) been able to ascertain the facts here or is this an issue for investigation by the Serious Fraud Office?”

Mr Kwarteng replied: “He raises very serious questions about the business model, which I’m not prepared to go into now.

“What I would say I, as Secretary of State in the first two months of my tenure, have pushed forward audit reform as a big issue.

“We’ve got a consultation on it.

“It’s issues relating to things like Greensill Capital that show how necessary it is for us to reconsider what we’re doing on audit reform and have the best standards in the world.”

Labour former minister Dame Angela Eagle added: “Can the Secretary of State explain why Greensill, an unregulated shadow bank with close links to the Conservative Party, was given access to the Coronavirus Large Business Interruption Loan Scheme – which is backed by 80% taxpayer guarantees?

“And following its collapse, which puts the future of Liberty Steel and thousands of jobs at risk, can the minister practise the transparency he’s just been talking about and tell the House how many millions of pounds of losses incurred will end up being dumped on the UK taxpayer?”

Mr Kwarteng said discussions are ongoing and the extent of the collapse on the British economy was not yet known.

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