Gupta’s landlord and lender push to wind up trading firm 

Sanjeev Gupta’s office landlord and a US investment group are pushing to wind up his commodities trading firm, opening up a new legal fight for the metals magnate who has spent the past two years battling creditors.

A subsidiary of German property group Patrizia is pursuing Liberty Commodities for £8.9mn through London’s high court, claiming the company “never paid a penny” towards a lease it took out on an office in the UK capital’s upscale Belgravia district in October 2019.

San Francisco-based White Oak, meanwhile, claims it was not paid $161.6mn under a receivables financing facility at Liberty Commodities when it came due in 2021, with the group alleging it is now owed more than $190mn when interest and other charges are taken into account.

The legal challenges come after Gupta recently reached an out-of-court settlement with Credit Suisse, whose wealthy clients had $1.3bn of exposure to the tycoon’s companies through a series of funds the bank ran with failed supply chain finance group Greensill Capital.

Citigroup, acting in its capacity as the trustee on bond-like products that Credit Suisse’s clients bought from Greensill, originally filed court petitions to wind up three of Gupta’s UK businesses in March 2021 in an effort to recover some of the money.

While Citigroup dropped petitions against two of Gupta’s industrial businesses last month, it was not able to withdraw the claim against Liberty Commodities as White Oak and Patrizia had already indicated they would support the petition.

The subsidiary of Patrizia has taken on Citigroup’s role as the “petitioning creditor” and White Oak is now the “supporting creditor” in the effort to wind up Liberty Commodities, which trades metals and once claimed to have annual revenues of more than $6bn.

Gupta has faced a wave of legal fights over debts linked to the collapse of Greensill in 2021. Liberty Commodities is part of GFG Alliance, Gupta’s collection of metals businesses that relied heavily on Greensill to finance their decade-long global expansion.

In a court hearing last week, a barrister for White Oak said that Liberty Commodities is “plainly insolvent” — noting that its 2021 accounts are now 15 months overdue — and argued that the company is trying to “delay the inevitable” by paying off its creditors “one by one”.

Liberty Commodities’ barrister told the court it would fight White Oak’s claim “tooth and nail”, arguing that the firm was not able to replace Citigroup as petitioner in the proceedings because its debt was “disputed”.

The barrister for Liberty also attempted to use allegations White Oak has made over the validity of the underlying receivables to undermine the firm’s claim to the more than $190mn it is seeking.

Receivables financing facilities allow companies to draw funding against the money they are owed from their customers.

In a recently filed lawsuit against insurance broker Marsh, White Oak alleged that some of Liberty Commodities purported customers listed under its receivables facility actually “have no transaction history whatsoever” with the metals trader.

This raised “an interesting question” over the validity of White Oak’s claim because it was assigned the receivables by Greensill and “assignment has to be of something that actually exists”, the barrister told the court.

The FT has previously reported that some parties named on invoices backing Liberty Commodities’ receivables facility from Greensill have denied ever trading with the firm. GFG Alliance is also under investigation from the UK’s Serious Fraud Office. The group has denied wrongdoing and pledged to co-operate with the investigation. 

White Oak’s barrister noted that while “one only has to Google the phrase ‘suspicious invoices’ . . . to find it all over the Financial Times”, the burden was on Liberty Commodities to advance a case surrounding the receivables and for White Oak to respond to that.

Patrizia is disputing Liberty Commodities’ claim that it forfeited the office at 40 Grosvenor Place on April 8, 2022. The metals trader claims that since that date its employees have not accessed the premises beyond the post room, save for when the SFO requested access to the building later that month “as part of their investigation”.

Liberty Commodities and other companies in Gupta’s GFG Alliance still list 40 Grosvenor Place as their “registered office” on Companies House.

In a statement to the FT, GFG Alliance said: “We remain in separate settlement discussions with smaller creditors and these proceedings are against Liberty Commodities Limited alone, which remain at a procedural stage, and will have no impact on Liberty Steel’s production and operations.”

Patrizia and White Oak declined to comment.