Finance

Cameron concerned about Greensill only as early as December, inquiry hears

Former Prime Minister David Cameron has said that he first became concerned that Greensill Capital might be in “serious financial difficulty” in December 2020 following a call he had from the founder of the now-collapsed supply chain finance firm.

Evidence released ahead of a hearing of MPs later today shows Cameron described the firm’s controversial leader Lex Greensill as a “friend” as he corresponded with leading government figures ranging from Rishi Sunak to Michael Gove in a bid to curry favours for the business.

Records of texts, emails and calls released span 28 pages, and show Cameron interacted with the deputy governor of the Bank of England Jon Cunliffe seven times and the permanent secretary to the Treasury Tom Scholar 14 times.

In his testimony to an inquiry into Greensill’s failure by the Treasury Committee, however, Cameron remained adamant that up until that point he had believed that Greensill would be a successful enterprise.

“The first time I became concerned that the company might be in serious financial difficulty was in December 2020 following a call I received from Lex Greensill, during which I was told that the company’s planned capital raising was not going as well as had been hoped,” Cameron wrote in a letter to the Treasury Committee made public on 11 May.

“Up until that point, I firmly believed that Greensill was in good financial health. In the autumn of 2020, I understood Greensill was on track for a relatively strong year financially and it had embarked upon what looked likely to be a successful capital raising,” Cameron, who took a part-time position as senior adviser to Greensill Capital in August 2018, added.

Cameron said that, prior to the conversation with Greensill, the company’s “large international backers” and “well-known international blue-chip companies” clients, alongside its “strong board” spoke to the “credibility of the company”.

Reports of Greensill Capital’s financial difficulties first emerged in the press as early as May 2020. In its evidence, the FCA told the committee that its staff were “aware” of the reports at the time.

The publication of the letter, as well as a timeline of conversations Cameron had with government officials, comes as the Treasury Committee kicks off its the next stage in its inquiry into the collapse of the supply chain finance firm.

Cameron is under scrutiny for lobbying the Treasury and the Bank of England on behalf of the firm.

Mel Stride, chair of the select committee and a Conservative MP, is leading the “Lessons from Greensill Capital” inquiry, which is focused on the regulatory lessons from the failure of the supply chain finance firm, as well as the appropriateness of the Treasury’s response to lobbying from Cameron during the Covid-19 crisis. 

READ Greensill probe: Tough questions for Rishi Sunak, David Cameron, and Andrew Bailey

In a letter, Stride asked Cameron for a description of when and how he first became aware of any potential financial difficulties or weaknesses at Greensill. The former prime minister was also asked how the lobbying of the Treasury was coordinated within Greensill.

On 8 April, the UK’s Treasury department published text messages sent from Sunak to Cameron in response to a Freedom of Information request. Sunak is quoted as telling Cameron on 3 April 2020 that he was “stuck back to back on calls but will try you later this evening and if gets too late, first thing tomorrow”.

READ Sunak’s Greensill texts to Cameron revealed: ‘I have pushed the team to explore an alternative’

On 23 April 2020, the chancellor sent a message saying that granting the supply chain firm access to the government’s Covid loan programme would require a change to the scheme “but I have pushed the team to explore an alternative with the Bank [of England] that might work”.

“No guarantees, but the Bank are currently looking at it and Charles [Roxburgh] should be in touch,” Sunak added. Roxburgh is the Treasury’s second-most-senior civil servant.

READ Emails reveal how David Cameron desperately lobbied Bank of England for Greensill

Cameron broke his silence regarding the unfolding scandal on 11 April, when he issued a statement apologising to those affected by the collapse of the supply chain finance firm. 

“I completely understand the public interest in this issue, given the impact of Greensill’s collapse on the hundreds of people who worked for the company and on other businesses and livelihoods,” Cameron said in the statement. 

Greensill was founded in 2011 by former Citigroup and Morgan Stanley banker Lex Greensill. The company filed for bankruptcy in March after it lost credit insurance that was crucial to its business. 

READGovernment to investigate David Cameron’s Greensill lobbying

Separately, the government has also launched an investigation into Cameron’s lobbying on behalf of Greensill, which will be led by Nigel Boardman, a former partner at law firm Slaughter and May.  

To contact the author of this story with feedback or news, email Bérengère Sim

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