Former British PM David Cameron accused of Greensill lobbying

Former British PM David Cameron personally lobbied the chancellor Rishi Sunak for Greensill Capital to be awarded lucrative taxpayer-funded loans

David Cameron, former British prime minister. Picture: Getty Images

The failed Australian financier Lex Greensill has become embroiled in a political scandal in the UK after his close friend, former prime minister David Cameron, was revealed to have personally lobbied the chancellor Rishi Sunak for Greensill Capital to be awarded lucrative taxpayer funded loans.

Mr Cameron, an adviser to Greensill Capital and the holder of what was then potentially many millions of pounds of share options, is accused of lobbying Mr Sunak through the back door by contacting him via email and on his private mobile number for COVID-19 emergency funds to help prop up Greensill, just months before its spectacular collapse.

In the UK, lobbying activities are meant to be officially recorded and the direct contact could sidestep freedom of information laws. The revelations have added weight for a full inquiry into the probity of Mr Cameron’s lobbying efforts.

Labour’s shadow chancellor Anneliese Dodds said: “Taxpayers and businesses deserve answers about why it appears Greensill was given so much access to the Treasury.

“The government must leave no stone unturned with a full and thorough investigation into this.”

Mr Cameron and Mr Greensill have a long intertwined relationship, with Mr Cameron awarding the Bundaberg-born financier a CBE in 2017, 12 months before the former PM was appointed as a company adviser.

The two go back to at least 2014 when Mr Greensill, through his friendship with his Morgan Stanley colleague and then head of the UK civil service Jeremy Heywood, was introduced to the corridors of power in 10 Downing Street.

Back then Mr Greensill became a “Crown representative” to help the government negotiate better commercial contracts.

Mr Cameron left Downing Street in 2016 after the leave vote was successful in the Brexit referendum and it is understood he was granted options worth 1 per cent of Greensill Capital to help facilitate the company’s expansion of its supply chain financing model. At one point Greensill was valued about £7bn ($12.5bn).

If Mr Cameron, 54, had been successful in his lobbying efforts to Mr Sunak, Greensill Capital would have been able to access huge tranches of money from the government-guaranteed COVID corporate financing facility to then on-lend to its clients, such as Whyalla’s steelmaking magnate Sanjeev Gupta. Mr Gupta, through another of his companies, Liberty Steel, employs about 5000 people in the UK steel making industry.

The Sunday Times reported that Mr Sunak supported the decisions of his treasury officials who had earlier rebuffed Mr Greensill’s approaches for the money. Records show that Greensill officials had 10 virtual meetings during the first lockdown in early 2020. But Greensill Capital didn’t qualify for the scheme as it was designed for non-financial companies to obtain government-backed credit, effectively bypassing financial institutions.

After being personally approached, it is reported that Mr Sunak referred Mr Cameron to other treasury officials.

Mr Cameron then made overtures to Tim Scholar, the permanent secretary, and Charles Roxburgh, the second permeant secretary, but his efforts were in vain.

However, Greensill Capital was able to tap into another government scheme, the coronavirus large business interruption loan scheme, which was capped at £50m. Through this scheme Greensill’s representatives tried to expand the cap to £200m, which was rejected. But Greensill was accredited as a government-backed lender and was able to extract £400m to lend on to Mr Gupta and others by applying for the scheme eight times. It is unclear if the government has since withdrawn its guarantee for these Greensill Capital loans.

The Labour opposition is also probing Mr Cameron’s links to Lex Greensill back in 2014 when the government-owned bank NatWest signed a deal with a Greensill-funded company, Taulia, which occurred just months after Lex Greensill was appointed a government adviser.

Greensill Capital specialised in a form of supply chain finance but it lost the confidence of the banks because of its major exposure to GFG Alliance, the various global steel and metal companies owned by Mr Gupta and his family.

Greensill Capital provided working capital to more than 40 major clients in the billions, including giants like AstraZeneca and Vodafone, as well as to Mr Gupta’s interests around the world, including debt-laden South Australian steel works in Whyalla, the Tahmoor metallurgical coal mine in NSW and manganese alloy smelters in Tasmania. During the company’s heyday in 2019, Mr Greensill would fly around the world in one of four private jets, a far cry from his family’s sugar cane and watermelon farming background in Queensland.

But several weeks ago skittish banks withdrew key insurance funding from Greensill, and the German government froze its banking operation, beginning an unravelling of the Greensill business around the world.