Finance Finance News Lex Greensill ‘desperately saddened’ by company collapse

Lex Greensill ‘desperately saddened’ by company collapse

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The boss of collapsed finance company Greensill has apologised and says he takes full responsibility as the UK financial watchdog launches a probe into the firm.

Lex Greensill told the House of Commons treasury committee: “Please understand that I bear complete responsibility for the collapse of Greensill Capital.

“I am desperately saddened that more than 1000 very hard-working people have lost their jobs at Greensill. Likewise, I take full responsibility for any hardship being felt by our clients and their suppliers, and indeed investors in our programs.

The Australian banker said the decision of the company’s leading insurer, Tokio Marine, to withdraw cover ultimately led to the collapse.

He said COVID-19 and the actions of authorities in Germany had played a role in the insurance company’s decision.

“It’s deeply regrettable that we were let down by our leading insurer whose actions assured Greensill’s collapse, and indeed some of our biggest customers,” Greensill said.

“To all of those affected by this. I am truly sorry.”

Separately, the Financial Conduct Authority (FCA) said it was formally investigating how two Greensill companies failed, and how one of them was overseen by a company whose licence it piggybacked on to operate in the UK.

FCA boss Nikhil Rathi said there had been a number of allegations about the circumstances in which Greensill failed, “some of which are potentially criminal in nature”.

“We are also co-operating with counterparts in other UK enforcement and regulatory agencies, as well as authorities in a number of overseas jurisdictions,” he says in a letter to MPs on the committee, which was released on Tuesday.

US-based Mirabella Advisers allowed Greensill Capital Securities to sell products here using its licence with the FCA.

In March, Mirabella ended its relationship with Greensill, which had been in place since 2017.

It made Greensill Capital Securities an appointed representative (AR) of Mirabella.

“A principal firm (in this case, Mirabella) is responsible for ensuring that, on an ongoing basis, its AR complies with the requirements, rules and regulations of the FCA,” Mr Rathi said.

Greensill collapsed earlier this year and its relationship to David Cameron, who lobbied for the firm, has been thrown into the limelight.

The company’s main business was so-called supply-chain finance, which ensures that suppliers get paid more rapidly by their customers than usual.

Greensill’s collapse caused shock waves among its customers, with worries that some could fail, putting thousands of jobs on the line.