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Greensill: what's what in scandal rocking UK politics

Jitendra JOSHI
·4-min read

The collapse in March of specialist finance company Greensill Capital has morphed into a broadening scandal that is ensnaring Conservative politicians and top civil servants in Britain.

In the latest revelation, Health Secretary Matt Hancock has confirmed he owns shares in a family company which has contracts with the state-run National Health Service (NHS). Among the services offered by the company: shredding of documents.

Here is a run-down of the affair, which has exposed a culture of privileged relationships in the heart of government at a time when millions of ordinary Britons are fearing for their livelihoods during the coronavirus pandemic.

- How it started -

Australian financier Lex Greensill obtained inside access to the Downing Street machine of then-prime minister David Cameron, on the promise of helping to bring the latest thinking on financial technology to government.

Cameron was forced to step down following Britain's Brexit referendum in 2016, and two years later became an adviser to Greensill Capital, amassing share options that were potentially worth millions.

This year, he privately lobbied senior officials including finance minister Rishi Sunak for government support before the firm's business model of supplying interim finance to companies imploded, rendering his share options worthless.

Greensill Capital was denied access to one government support scheme, but had been added to another previously.

- Who's involved? -

Cameron is most directly in the firing line because of his personal and undeclared lobbying. He admits he should have gone through formal channels, but denies any impropriety.

Official correspondence now shows that at least one top civil servant, and another adviser brought in from big business, were on the Greensill payroll even as they worked for the government.

Other advisers to Greensill included former Labour interior minister David Blunkett, Australian ex-foreign minister Julie Bishop and Bernard Hogan-Howe, formerly the head of London's Metropolitan Police force.

The collapse has also embroiled lenders in Germany and Switzerland, and threatens thousands of jobs at companies that relied on Greensill's supply chain financing, including at the steel empire of Indian-British billionaire Sanjeev Gupta.

- What about today's government? -

Prime Minister Boris Johnson has ordered an independent investigation by a senior lawyer, and Cameron says he will cooperate. It is due to report back in June, but critics question whether its remit will extend to the entire culture of lobbying.

Three parliamentary committees have launched their own probes into various aspects of the affair, with the power to call witnesses.

Among those is likely to be Hancock, who met Cameron and Lex Greensill for a "private drink" in 2019 to discuss a new payment scheme for the NHS.

The health ministry says he reported the conversation to officials afterwards, in line with government rules.

The ministry also says there was no conflict of interest regarding Hancock's recently declared shareholding in the company owned by his sister.

But it has fuelled opposition allegations of cronyism after the government handed out at least £10.5 billion ($14.5 billion, 12.1 billion euros) in no-bid contracts to favoured companies at the onset of the pandemic early last year.

Johnson became embroiled in the widening drip-feed of revelations when it emerged this week that Crown Prince Mohammed bin Salman had last year sent him personal WhatsApp messages regarding a planned Saudi takeover of Newcastle United football club.

- Why does it matter? -

Greensill is turning into the worst Westminster scandal since 2009, when it emerged that many MPs had been fiddling their expenses, fuelling public disgust with the political class in the years leading up to the 2016 Brexit referendum.

The opposition Labour party hopes the affair will cut through with voters ahead of UK-wide local elections on May 6, although Johnson's Conservatives hold a strong lead in opinion polls on the back of a successful vaccination campaign against Covid-19.

More widely, it raises questions about rules on lobbying that were updated by the Cameron government but have been shown to be toothless in some of the Greensill cases, at a time of lavish state support during the pandemic.

Eric Pickles, head of an advisory panel that vets former ministers and civil servants wanting to go into business after serving in government, wants immediate changes and greater powers to inject transparency into the system.

"I hope this doesn't sound rude, but it appears there weren't any boundaries at all," he told a committee of MPs on Thursday regarding the Greensill affair.

jit/phz/txw