FCA launches formal probe into Greensill’s UK operations
The City regulator has launched a formal investigation into the UK operations of collapsed supply chain firm Greensill Capital as part of wider global probes.
The Financial Conduct Authority’s chief executive Nikhil Rathi gave the first confirmation the regulator is investigating Greensill seen it collapsed into administration in March.
Greensill Capital was the brainchild of former Citigroup and Morgan Stanley financier Lex Greensill and received backing from Softbank’s Vision Fund.
It specialised in supply chain finance and claimed to lower costs before grabbing headlines after crashing into insolvency last month.
“The FCA is formally investigating matters relating to Greensill Capital UK (GCUK) and Greensill Capital Securities (GCSL) and the oversight of GCSL by its principal, Mirabella Advisers, ” he said in a letter to Treasury Select Committee chair Mel Stride.
“We are also cooperating with counterparts in other UK enforcement and regulatory agencies, as well as authorities in a number of overseas jurisdictions.”
The Treasury Committee has opened inquiry into lessons from Greensill’s collapse and will today meet with the company’s founder Lex Greensill. Rathi will appear before the committee tomorrow.
The FCA said it was only responsible for supervising how Greensill Capital UK complied with anti-money safeguards.
“The wider activities that GCUK undertook were not regulated by the FCA… and the origination of a supply-chain finance instrument is not a regulated activity,” Rathi said.
In a separate submission, the Bank of England governor Andrew Bailey said the bank first became aware of a “potential weakness” last March, when Cameron stepped up his lobbying activities.
However, he said this related to a “possible weakness in controls rather than crystallised financial difficulties”.
Rathi said: “We agree with the Bank of England’s assessment that the Greensill entities were not systemically important for the purposes of UK financial stability”. .