German prosecutors file lawsuit against Greensill bosses over role in bank’s collapse

German prosecutors have brought criminal charges against three people involved in running Greensill Bank for their role in the 2021 collapse of the lender.The Bremen public prosecutor’s office said the unnamed people were charged with crimes related to the bankruptcy, as well as the misrepresentation of the German bank’s finances.The people are alleged to have circumvented banking regulations involving a €2.2bn (£1.9bn) refinancing in 2019 of steel plants owned by the Gupta Family Group Alliance (GFG), a struggling group of companies overseen by metals tycoon Sanjeev Gupta. The prosecutors alleged the refinancing caused the collapse of the bank.Greensill Bank was founded by Lex Greensill, an Australian financier who rose to prominence by providing supply chain finance, in which companies receive advances on invoices in exchange for a fee.The company rapidly rose to prominence, and hired the former UK prime minister David Cameron as a paid adviser. However, it collapsed in 2021 amid concerns over risky loans to GFG companies.Two of the people charged were formerly members of the bank’s management board, and another was a member of its supervisory board, the prosecutor’s office said in a statement on Wednesday.The prosecutors said there was a “suspicion the accused deliberately misrepresented the loan business in the 2019 accounting records and financial statements as a low-risk and regulatory-compliant receivables purchase programme”.It is understood that Lex Greensill is not one of the people charged by the Bremen authorities. Greensill Bank was based in the northern German city.The case adds to the lengthy legal fallout from the Greensill collapse. Since 2021, the UK’s Serious Fraud Office has been investigating suspected fraud and money laundering in relation to GFG companies and their financing arrangements with Greensill Capital UK, another part of Lex Greensill’s empire.It is understood that GFG companies have not been involved in the German prosecutor’s investigation or in any of the proceedings in Germany.The Greensill collapse caused turmoil in Gupta’s companies, as they sought to find different lenders. Gupta has since lost control of several metals businesses around the world, including in France, Australia, and the UK. The UK high court placed Speciality Steel UK into administration in August, prompting the government to step in to run several steelworks in south Yorkshire.A spokesperson for GFG declined to comment.