Cameron, Hancock and Lex Greensill
Discussion
OK, so it's the Grauniad but is David Cameron looking to be the new Tony Blair?
https://www.theguardian.com/politics/2021/apr/10/r...
SD.
https://www.theguardian.com/politics/2021/apr/10/r...
SD.
Think the Times are breaking most of it?
https://www.thetimes.co.uk/article/david-cameron-l...
I wonder if Hancock is taking another photo down off his study wall as I type
https://www.thetimes.co.uk/article/david-cameron-l...
I wonder if Hancock is taking another photo down off his study wall as I type
It’s certainly not looking great for CMD is it?!
As I understand it, Greensill were looking to be a major player, CMD was their “in” bloke. The system of payments that the contract was for isn’t anything revolutionary. The Times are hammering it because Greensill has no f
king money! They were playing the Peter and Paul game and hoping like hell to secure enough to move to a stable base.
My suspicion is that Hancock will be fine from this, he isn’t the target. It *looks* like Greensill said we can do this for this much dosh, much more efficient. I think the target is CMD and Boris is happy to let it roll. Don’t think Hancock will enjoy the Parliamentary questions though !
As I understand it, Greensill were looking to be a major player, CMD was their “in” bloke. The system of payments that the contract was for isn’t anything revolutionary. The Times are hammering it because Greensill has no f
king money! They were playing the Peter and Paul game and hoping like hell to secure enough to move to a stable base. My suspicion is that Hancock will be fine from this, he isn’t the target. It *looks* like Greensill said we can do this for this much dosh, much more efficient. I think the target is CMD and Boris is happy to let it roll. Don’t think Hancock will enjoy the Parliamentary questions though !
Certainly stinks a bit. I bet this sort of thing goes on all the time but just looks bad when a specific example is picked apart and laid bare. In fairness, the bottom line seems to be that despite the hard lobbying, the Civil Service appears to have mostly done its job under considerable pressure from above and ultimately said No to most stuff having asked the right questions and not gotten back satisfactory answers.
The Times certainly appears to be going for the jugular, but if its only impact is to remind our elected politicians that process is there for a reason and they are not above it and hold fires to the feet then journalism will have done its job.
The Times certainly appears to be going for the jugular, but if its only impact is to remind our elected politicians that process is there for a reason and they are not above it and hold fires to the feet then journalism will have done its job.
Isn't this why companies "employ" ex-politicians, for their influence?
Interesting to see suggestions of fake invoices used by Sanjeev Gupta to secure loans from Greensill.
https://www.ft.com/content/e450c8f9-29fa-432b-98fd...
Interesting to see suggestions of fake invoices used by Sanjeev Gupta to secure loans from Greensill.
https://www.ft.com/content/e450c8f9-29fa-432b-98fd...
Murph7355 said:
I seem to recall reading a while ago that there's no love lost between Johnson and Cameron and that the former feels a need to compete with the latter. I wonder whether that will come into play 
Murph, this is exactly it. It’s why I think Boris is happy for this to roll, CMD is the target. Hancock won’t thank him it, coz he is going to get a grilling over the next cpl of weeks on this, but Bojo thinks he can get CMD properly screwed on this one. CMD has properly screwed the pooch on his choice of firm to “consult” with!I fully agree on there being lobbying rules on ex ministers for a period of time.
Gets even smellier when you look at who Greensills customers were and what they were up to! "Suspect Sanjeev Gupta invoices used in Greensill loans raise fraud concerns" - https://www.ft.com/content/e450c8f9-29fa-432b-98fd...
dukeboy749r said:
Once out of parliament, perhaps PMs should be banned from lobbying for X number of years. Ministers, similar and MPs say two?
Then they’d have to make their way back in the world and the cronyism might decrease.
Then they’d have to make their way back in the world and the cronyism might decrease.
maybe 5 unless an opposition party comes into power in the meantime 
I’ve had a bit of a weather eye on this, and I was going to start a thread - there is one!
Do you think the government are going to come out with some unpalatable news soon?
And this is just a ‘smoke and mirrors’ tactic
It does not surprise one jot, that miscarriage of a human being (Hancock) has now been linked .
Lobbying? Quell surprise?
Has this never been considered before as reality?
I mean really?
Is Boris using his links to the press to sully Hancock?
But then again why? The public already had a good understanding what an absolute slimy piece of excrement Hancock is.
Do you think the government are going to come out with some unpalatable news soon?
And this is just a ‘smoke and mirrors’ tactic
It does not surprise one jot, that miscarriage of a human being (Hancock) has now been linked .
Lobbying? Quell surprise?
Has this never been considered before as reality?
I mean really?
Is Boris using his links to the press to sully Hancock?
But then again why? The public already had a good understanding what an absolute slimy piece of excrement Hancock is.
There's an old saying when dealing with dodgy characters, " Count your fingers after shaking hands!"
Wouldn't trust any politician, which is sad really as they're the ones who affect everything!
Out of interest, how many of you actually trust this current bunch?
How do I start a poll on here?
Or can one of the mods set it up for me? Pretty Please??
Wouldn't trust any politician, which is sad really as they're the ones who affect everything!
Out of interest, how many of you actually trust this current bunch?
How do I start a poll on here?
Or can one of the mods set it up for me? Pretty Please??
Hancock isn’t the target, CMD is.
The scheme is...well, not chancy, but very financial leverage’y. As I said, my understanding is they were doing a Peter and Paul job to get themselves in the game. CMD was the golden key to make it all work.
The reporting of all this isn’t a hatchet job, it’s very much The Times doing good work and highlighting the dodgy lobbying relationship that exists. Bojo will let this one run though because CMD! Hancock will just have to suck it up.
The scheme is...well, not chancy, but very financial leverage’y. As I said, my understanding is they were doing a Peter and Paul job to get themselves in the game. CMD was the golden key to make it all work.
The reporting of all this isn’t a hatchet job, it’s very much The Times doing good work and highlighting the dodgy lobbying relationship that exists. Bojo will let this one run though because CMD! Hancock will just have to suck it up.
bhstewie said:
hstewie said:
The whole story of how Greensill worked is really interesting, its definatly pushing the boundaries of legality with regards to what debt was classed as on balance sheets, and there are already a few law suits going on because Greensill have recalled what they regard to be short term loans and what the customer regards as long term loans.
Basically Greensill were offering short term invoice financing. Invoice goes out, Greensill gives you 95% of the money now, when customer pays in 60 days Greensill get 100% of the invoice, making a quick and safe 5% profit. You get paid when the invoice goes out and so get good cash flow.
However, Greensill were offering debt against future invoices. Not only that, they were offering debt against future customers. So a coal supplier would be able to get debt against a named steel manufacturer, even if the 2 had never done business. After 60 days when no invoice had been produced or paid, the debt would be rolled over for another 60 days in the hope that they would become a customer then. It's facinating that anyone thought this was good idea, but they did.
Written much better than I ever could, by the eloquent Matt Levine from Bloomberg;
Matt Levine said:
The basic way that Greensill Capital worked is that it would help companies finance their payables and receivables. A client would sell products to customers on credit, and Greensill would pay the client early at a discount and then collect the money later from the customers (“receivables finance” or “factoring”). Or the client would buy products from suppliers on credit, and Greensill would pay the suppliers early at a discount and then collect the money later from the client (“supply-chain finance” or “reverse factoring”).
The more advanced way that Greensill Capital worked is that sometimes it would sit down with a client and imagine who might one day become a customer of that client, and then imagine how much of the client’s product that hypothetical customer might buy from the client, and then Greensill would pay the client early for those entirely hypothetical receivables, and then Greensill would collect the money later from the customer, if the customer actually became a customer and bought things from the client. If not, Greensill and the client would keep rolling the loans over and hope that one day the customer would show up.
This is called “prospective receivables finance” and is … uh … well, it’s weird? It is very different from traditional receivables financing. Normal receivables financing is safe and short-term lending: You give the client money for products it has already sold, and then you collect the money a few weeks later from real creditworthy buyers who have to pay you to keep getting supplies and operating their businesses. Prospective receivables financing is necessarily speculative, long-term, unsecured lending: You give the client money today in the hopes that it will build its business and attract new customers and sell them new products and bill them for the products and eventually, one day, you will collect on those bills.
We talked about this a few weeks ago, when Bluestone Resources Inc. sued Greensill. Bluestone is a coal company that sells coal to steel companies, and it got a lot of “receivables financing” from Greensill against prospective receivables from steel companies it never met. When Greensill became insolvent, Bluestone sued, arguing that obviously this was meant to be long-term financing and that it shouldn’t have to pay it off until it turns the prospective customers into real ones.
One problem with “prospective receivables finance” is that it is easy to confuse with fraud. Greensill was very much in the business of taking clients’ real customer receivables, giving the clients money, and collecting the money later from the customers; it was also very much in the business of taking clients’ entirely imaginary customer receivables, giving the clients money, and hanging out waiting to see if the customers ever materialized. This was all disclosed and understood and negotiated[1]; Greensill knew which receivables were real and which were fake, and presumably it advanced money on different terms for the real and fake receivables. But as I type it, it all seems absurd, and if you were not deeply involved in the day-to-day relationship between Greensill and its clients, you might be shocked to learn that Greensill would lend a client money against “receivables” from “customers” who had never even heard of the client.
Here is a funny Financial Times story about Greensill’s insolvency administrator, who showed up late to this party and was understandably shocked:
Greensill Capital’s administrator has been unable to verify invoices underpinning loans to Sanjeev Gupta, after companies listed on the documents denied that they had ever done business with the metals magnate. …
Grant Thornton, which is looking to recoup money owed to Greensill in its role as administrator to the collapsed firm, last month approached companies that were listed as debtors to Gupta’s Liberty Commodities trading firm, which borrowed hundreds of millions of pounds backed by invoices.
Greensill had extended a receivables financing facility to Liberty Commodities that allowed it to exchange bills from customers for cash upfront. This process, also known as factoring, meant that Greensill would get repaid when the customer settled the invoice, by paying for goods it purchased from Liberty.
However, several of these companies have disputed the veracity of the invoices from the metals magnate’s commodities trading firm, according to people familiar with the matter and correspondence seen by the Financial Times.
RPS Siegen GmbH, a German scrap metals business, confirmed to the FT that it had been approached about an outstanding invoice and said that it had not traded with Liberty Commodities.
“We know them, but a trading relationship between us does not exist,” said Winfried Winterhager, manager at RPS Siegen.
Well that sounds terrible! Except that that really was (sometimes) how Greensill operated, so you can’t tell from this story whether (1) Liberty was doing a fraud on Greensill by submitting fake invoices to borrow against fake receivables from fake customers or instead (2) Liberty and Greensill agreed, with full disclosure and understanding, that Greensill would give Liberty long-term unsecured financing but document it as receivables financing involving hypothetical customers. Option (2) sounds bizarre, but it was definitely a big part of Greensill’s business. And in fact, in a follow-up article, the Financial Times reports that Gupta gave exactly that explanation:
Gupta later told the FT that the company named on Friday, RPS Siegen GmbH, had only been “identified as a potential customer” and financing was provided on that basis.
I don’t know if that’s true, for RPS Siegen GmbH or for the other disputed invoices that Grant Thornton discovered. (That follow-up article also reports that “commodities trading houses have launched investigations after web domains resembling their own were registered to an email address of an employee at Sanjeev Gupta’s metals empire,” which is pretty weird!) The point is just that if you are in the business of financing real receivables and also fake receivables, any time someone finds a fake receivable and says “aha, fraud!” you can say “no no no we meant to do that, that was an intentionally fake invoice, you just don’t understand how the prospective receivables financing business works.”
I do not envy Grant Thornton. Their job right now is pretty much going around to companies, presenting them with invoices, and getting laughed out of the room: “That’s not our invoice, we’ve never even heard of Liberty Commodities or Greensill, get outta here.” And then they go back to Greensill with their findings and get laughed out of the room again: “Of course it’s not their invoice, they were just a potential customer, how could you be so naive?” And then Grant Thornton has to tentatively ask, “Well, okay, but then who is going to pay this invoice?” And then there is a long awkward silence.
The more advanced way that Greensill Capital worked is that sometimes it would sit down with a client and imagine who might one day become a customer of that client, and then imagine how much of the client’s product that hypothetical customer might buy from the client, and then Greensill would pay the client early for those entirely hypothetical receivables, and then Greensill would collect the money later from the customer, if the customer actually became a customer and bought things from the client. If not, Greensill and the client would keep rolling the loans over and hope that one day the customer would show up.
This is called “prospective receivables finance” and is … uh … well, it’s weird? It is very different from traditional receivables financing. Normal receivables financing is safe and short-term lending: You give the client money for products it has already sold, and then you collect the money a few weeks later from real creditworthy buyers who have to pay you to keep getting supplies and operating their businesses. Prospective receivables financing is necessarily speculative, long-term, unsecured lending: You give the client money today in the hopes that it will build its business and attract new customers and sell them new products and bill them for the products and eventually, one day, you will collect on those bills.
We talked about this a few weeks ago, when Bluestone Resources Inc. sued Greensill. Bluestone is a coal company that sells coal to steel companies, and it got a lot of “receivables financing” from Greensill against prospective receivables from steel companies it never met. When Greensill became insolvent, Bluestone sued, arguing that obviously this was meant to be long-term financing and that it shouldn’t have to pay it off until it turns the prospective customers into real ones.
One problem with “prospective receivables finance” is that it is easy to confuse with fraud. Greensill was very much in the business of taking clients’ real customer receivables, giving the clients money, and collecting the money later from the customers; it was also very much in the business of taking clients’ entirely imaginary customer receivables, giving the clients money, and hanging out waiting to see if the customers ever materialized. This was all disclosed and understood and negotiated[1]; Greensill knew which receivables were real and which were fake, and presumably it advanced money on different terms for the real and fake receivables. But as I type it, it all seems absurd, and if you were not deeply involved in the day-to-day relationship between Greensill and its clients, you might be shocked to learn that Greensill would lend a client money against “receivables” from “customers” who had never even heard of the client.
Here is a funny Financial Times story about Greensill’s insolvency administrator, who showed up late to this party and was understandably shocked:
Greensill Capital’s administrator has been unable to verify invoices underpinning loans to Sanjeev Gupta, after companies listed on the documents denied that they had ever done business with the metals magnate. …
Grant Thornton, which is looking to recoup money owed to Greensill in its role as administrator to the collapsed firm, last month approached companies that were listed as debtors to Gupta’s Liberty Commodities trading firm, which borrowed hundreds of millions of pounds backed by invoices.
Greensill had extended a receivables financing facility to Liberty Commodities that allowed it to exchange bills from customers for cash upfront. This process, also known as factoring, meant that Greensill would get repaid when the customer settled the invoice, by paying for goods it purchased from Liberty.
However, several of these companies have disputed the veracity of the invoices from the metals magnate’s commodities trading firm, according to people familiar with the matter and correspondence seen by the Financial Times.
RPS Siegen GmbH, a German scrap metals business, confirmed to the FT that it had been approached about an outstanding invoice and said that it had not traded with Liberty Commodities.
“We know them, but a trading relationship between us does not exist,” said Winfried Winterhager, manager at RPS Siegen.
Well that sounds terrible! Except that that really was (sometimes) how Greensill operated, so you can’t tell from this story whether (1) Liberty was doing a fraud on Greensill by submitting fake invoices to borrow against fake receivables from fake customers or instead (2) Liberty and Greensill agreed, with full disclosure and understanding, that Greensill would give Liberty long-term unsecured financing but document it as receivables financing involving hypothetical customers. Option (2) sounds bizarre, but it was definitely a big part of Greensill’s business. And in fact, in a follow-up article, the Financial Times reports that Gupta gave exactly that explanation:
Gupta later told the FT that the company named on Friday, RPS Siegen GmbH, had only been “identified as a potential customer” and financing was provided on that basis.
I don’t know if that’s true, for RPS Siegen GmbH or for the other disputed invoices that Grant Thornton discovered. (That follow-up article also reports that “commodities trading houses have launched investigations after web domains resembling their own were registered to an email address of an employee at Sanjeev Gupta’s metals empire,” which is pretty weird!) The point is just that if you are in the business of financing real receivables and also fake receivables, any time someone finds a fake receivable and says “aha, fraud!” you can say “no no no we meant to do that, that was an intentionally fake invoice, you just don’t understand how the prospective receivables financing business works.”
I do not envy Grant Thornton. Their job right now is pretty much going around to companies, presenting them with invoices, and getting laughed out of the room: “That’s not our invoice, we’ve never even heard of Liberty Commodities or Greensill, get outta here.” And then they go back to Greensill with their findings and get laughed out of the room again: “Of course it’s not their invoice, they were just a potential customer, how could you be so naive?” And then Grant Thornton has to tentatively ask, “Well, okay, but then who is going to pay this invoice?” And then there is a long awkward silence.
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