Sanjeev Gupta’s GFG files financial accounts revealing web of inter-company dealings

Accounts for Liberty Primary Metals, which houses Whyalla steelworks, have not been lodged as yet. Picture: Brett Hartwig

At last! A set of financial accounts for some of the companies caught under the umbrella of Sanjeev Gupta’s GFG Alliance.

Sadly, not ones from any of the main entities in the group – Liberty Primary Metals, for example, which houses his former Whyalla steelworks operations, as well as the financially troubled Tahmoor colliery and the Liberty Bell Bay alloy smelter. Nor has the group lodged accounts for Infrabuild, lately the subject of a rescue by lenders.

All of those, presumably, are still the subject of discussion between Gupta’s head office and Australian auditors KPMG. Along with the dozens owed to British regulators, currently taking legal action over the matter.

But the few that have been dropped out – along with those of a related company in Britain, owned by Gupta’s father Parduman – still go a fair way to highlighting exactly how entangled are the affairs of the group.

That’s a matter already highlighted by Whyalla administrators KordaMentha, who told the Federal Court in February the accounting entanglement – which includes a plethora of service fees and inter-company charges – “made it difficult for the administrators to obtain a complete set of the books and records”.

How much so? Take Liberty Greenpower, which filed accounts for the 2022 and 2023 financial years with ASIC last week.

However … from the accounts it appears that Greenpower was buying energy for Whyalla and selling it on via a “pass through” arrangement. It sold $66.8m worth of power to Whyalla in the 12 months to the end of June 2023. And collected $4.9m in service fees for the arrangement. About 7 per cent, on Margin Call’s rough maths.

At the same time it appears that Whyalla was, in fact, fronting at least some of the cash needed by Greenpower to buy the energy, through a series of loans – themselves carrying an interest rate of 7 per cent, plus the bank bill swap rate. At the end of the 2023 financial year, Greenpower owed Whyalla around $33.6m. Not, sadly for KordaMentha, something that can be easily recovered for creditors owed around $1.3bn until the middle of next year.

Greenpower was buying the power through contracts for difference, according to the accounts – suggesting it was effectively playing on the spot market rather than allowing Whyalla to lock in cheaper long-term power agreements.

Then there’s the case of British company Marble Power, controlled by Gupta senior – who took control of the company from his son in March 2023. It is also a power reseller heavily exposed to GFG’s operations in Britain.

Its recently lodged 2024 accounts show 16 per cent of its energy sales went to GFG companies, down from 43 per cent in 2022.

That’s a matter lauded in the accounts for reducing Marble’s “concentration risk” – particularly as Parduman also notes that his son’s flailing GFG empire has “had liquidity issues”. So much so that Marble Power wrote off about £5.9m ($12.3m) in doubtful loans made to GFG companies – which also owe some $17.3m in trade debt.

But Marble Power was also, for some reason not really explained in the accounts, acting as a pay master for some of GFG’s UK operations until May 2024, handling salary payments to GFG staff worth around $23.4m.

Oddly enough, as Margin Call revealed in March, until recently Marble Power was also acting as the postmaster for many of GFG’s UK companies. Why? Only Sanjeev and his father can say.

One last oddity. The Greenpower accounts were signed off by Gupta and auditors KPMG in February 2024, but only lodged this month. Margin Call asked GFG why they were so tardy, but no reply was forthcoming.

But Margin Call can’t help but note that the timing means that Greenpower didn’t have to make any commentary about its current solvency. Surely in doubt now that KordaMentha are negotiating new long-term power agreements to keep Whyalla running.