The prosecutor's office in Paris expanded its investigation into Sanjeev Gupta's GFG Alliance which owes hundreds of millions to Credit Suisse's Greensill funds.
French police widened their investigation into the empire of Indian-born metals magnate Sanjeev Gupta whose group of companies has faced suspicion of fraudulent trading since the collapse of its main lender, Greensill Capital, according to a report in the «Financial Times» (behind paywall) on Tuesday.
Money Laundering
French criminal investigators raided the Paris offices of GFG Alliance Group, along with metalworks formerly belonging to the company.
The Paris prosecutor's office launched investigations last year into Gupta's French subsidiaries for alleged «misuse of corporate assets» and «money laundering», which are similar to those in a separate investigation being conducted by the U.K.'s Serious Fraud Office (SFO).
Aluminum Smelter
Last week's raids also targeted an aluminum smelter in the French port city of Dunkirk, which Gupta's family conglomerate lost last year when it was seized by private equity group American Industrial Partners.
According to the report, questions from Dunkirk police officials focused on several transactions which took place while the plant was still under GFG's control. One such transaction allegedly used funds from the facility to settle a $25 million legal dispute with Rio Tinto.
GFG claimed the payment was to settle a claim for discounted energy and an agreement to «waive pre-existing claims between the two groups.»
Financial Difficulties
Credit Suisse was forced to close its joint supply chain funds with Greensill Capital on an emergency basis in March 2021, resulting in the latter's bankruptcy. This left GFG facing acute financial distress, with the conglomerate still owing Credit Suisse money running into hundreds of millions of dollars.
The Greensill debacle has taken its toll on Credit Suisse, which last week announced it would report a first-quarter loss and significantly increased legal provisions by around 600 million francs ($631 million), as finews.com reported.
