Finance

Sunak’s Greensill texts to Cameron revealed: ‘I have pushed the team to explore an alternative’

The UK’s Treasury department have published text messages sent from the UK’s Chancellor of the Exchequer Rishi Sunak to David Cameron, amid concerns about the former prime minister’s efforts to lobby the UK government for emergency funding for the now-defunct Greensill Capital.

Cameron, who was an adviser to Greensill Capital, was reported to have lobbied the UK government to increase the supply chain finance firm’s access to state-backed emergency Covid-19 loan schemes, months before its collapse. Cameron has not commented publicly on the allegations.

In texts published today in response to a Freedom of Information request, Sunak is quoted as telling Cameron on 3 April 2020 that he was “stuck back to back on calls but will try you later this evening and if gets too late, first thing tomorrow”.

READ Credit Suisse ignored key warnings — then came Archegos and Greensill

On 23 April, Sunak followed up with a message that clarified that granting Greensill access to the government’s Covid loan programme would require a change to the scheme: “I think the proposals in the end did require a change to the Market Notice but I have pushed the team to explore an alternative with the Bank that might work. No guarantees, but the Bank are currently looking at it and Charles [Roxburgh] should be in touch.”

Charles Roxburgh is the Treasury’s second most senior civil servant. In a series of internal emails also released by Treasury, Roxburgh is copied into an 18 May email from an undisclosed sender which states: “I concluded that it wouldn’t deliver sufficiently for UK SMEs to justify a major extension to the [Covid loan scheme], bearing in mind also that I have announced other more targeted schemes for SMEs, and that Greensill might well have ended up being the only participant in this one.”

Greensill was founded in 2011 by former Morgan Stanley and Citigroup banker Lex Greensill. The firm specialised in supply chain finance, a form of short-term corporate lending.

READ Credit Suisse slashes bonuses, considers clawbacks for top brass amid Greensill fallout

Greensill filed for bankruptcy in March after it lost credit insurance that was crucial to its business. Credit Suisse suspended the investment funds. Greensill’s bank in Germany is under investigation by authorities into its accounting for loans to a major client.

Greensill planned to outmanoeuvre big banks that dominate the industry with better technology and by offering the service to more clients. Many of Greensill’s clients were blue-chip companies, though it also made other, riskier loans that were longer-term or for borrowers that were more precarious.

The startup’s business model required complex financial engineering. It made supply chain loans to companies, then packaged them up into notes, selling those on to investors, which served as off-balance-sheet financing for Greensill.

To contact the author of this story with feedback or news, email Lucy McNulty

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