Top Gupta director Dak Patel quits InfraBuild board

A trusted lieutenant of Sanjeev Gupta has quit the board of steel products company InfraBuild, as the British industrial magnate reels from losing control of Whyalla.

Sanjeev Gupta was in Sydney this week holding meetings before the Whyalla bombshell broke.

A trusted lieutenant of one-time tycoon Sanjeev Gupta has quit the board of steel products company InfraBuild, the latest shake-up for the British industrial magnate reeling from the South Australian government seizing control of his Whyalla steel mill.

Dak Patel, a former chief executive of InfraBuild, stepped down as a director of the company on January 25, according to filings lodged on Thursday with the corporate regulator.

Mr Patel was the InfraBuild chief executive from October 2019 to July 2021, before moving into his board role. InfraBuild’s website continues to list Mr Patel as a director.

He also stepped down as a director on Thursday of Liberty Whyalla Hydrogen, the same day South Australian Premier Peter Malinauskas axed the flagship $593m hydrogen plant amid the financial chaos surrounding the Whyalla steelworks.

Both the hydrogen unit and its board are understood to have been vacant for some time, ­sources said.

Mr Patel was lured to lead InfraBuild by Mr Gupta in 2019 after making his name as the founder of Mesh & Bar, Australia’s largest ­independent steel reinforcing company. His company became a customer of Arrium, bought by Mr Gupta in 2017 as part of the Whyalla deal.

After his two-year stint as CEO, Mr Patel was tapped by Mr Gupta just over a year later to again run the company after Vik Bansal was poached by Kerry Stokes’s Seven Group to run Boral.

InfraBuild confirmed his exit in a statement late on Friday.

“In January, Daksesh Patel stepped down from his position as a non-executive director on the InfraBuild board to focus on his family’s business interests. Mr Patel is a well wisher and will be a senior adviser to InfraBuild team as and when required,” a spokeswoman said. While InfraBuild is regarded as one of Mr Gupta’s strongest assets, ratings agency Moody’s warned earlier in February a $US550m ($860m) debt default at the company could be triggered if the company did not file its already-delayed financial accounts before the end of March.

Moody’s, which further downgraded InfraBuild’s debt rating to a lower level of junk, said the amount GFG would have to pay to settle debts with its creditors on a global basis “still remains ­uncertain, though we understand that constructive negotiations are ongoing’’.

Mr Gupta was in Sydney this week holding meetings before the Whyalla bombshell broke. It is understood as recently as Sunday the chief executive was still in discussions over securing a long-awaited $150m loan to prop up the ailing Whyalla works.

The British businessman has said he did not support the South Australian government’s move and was seeking legal advice.

When The Australian visited Mr Gupta’s Potts Point mansion Bomera, an unidentified man who answered an intercom said the businessman was not home.

A large black 4WD was parked in the driveway. The man said he could not confirm when Mr Gupta would return, referring questions to GFG.

A month after buying Arrium in 2017, Mr Gupta agreed to take a controlling stake in Ross Garnaut’s ZEN Energy renewable power and battery storage business.

While the deal was dissolved in 2020, Mr Garnaut briefly sat on a blue chip advisory board for the one-time billionaire.

He told The Australian he was hopeful the shock move by the state government might ­deliver fresh certainty for the Whyalla operations.

“Australia has a great future in the production and export of green iron and steel. I hope that this week will turn out to be a step forward. We will learn about that in the future,” he said.

InfraBuild is ringfenced from Whyalla but as a secured creditor is owed at least $100m, including prepayments from delivery of steel billets it buys from the South Australian mill.

InfraBuild’s steel distribution business is Australia’s largest processor and distributor of long steel products through its electric arc furnaces, and produces 1.4 million tonnes of recycled steel across the country. It operates at more than 140 locations nationally, including 26 domestic recycling centres and 113 ­retail and distribution sites.

Sanjeev Gupta’a luxury Potts Point home.

InfraBuild CEO Francisco Irazusta on Friday stressed the financial strength of his company, saying it was “business as usual”.

Mr Irazusta on Friday stressed his green credentials, saying: “InfraBuild has invested more than $330m in capex over the last three financial years, driving our low-emission steelmaking capacity including our new SENSE 600 lower embodied carbon reinforcing steel.”

The company reported a loss of $18.6m in the last financial year, and a $239.6m profit in the 2023 financial year.

Peter Dutton said on Friday the opposition would match the $2.4bn put up by the government to save the Whyalla steelworks but would not back Anthony Albanese’s “hydrogen fantasy”.

Mr Malinauskas confirmed on Thursday the hydrogen plant had been “deferred” indefinitely, with the $593m now set aside to address emerging issues with the Whyalla steelworks ahead of its hopeful sale to a new operator.

It is the fifth major hydrogen project to fall over in barely a year, following decisions by Fortescue, Woodside and Origin to abandon hydrogen as experimental and expensive.

Additional reporting: David Ross

Originally published as Top Gupta director Dak Patel quits InfraBuild board