The City watchdog has opened the door to a criminal prosecution of Greensill Capital and confirmed that it is investigating the failed lender.
Nikhil Rathi, chief executive of the Financial Conduct Authority, said that the regulator was “investigating matters relating to Greensill Capital”. His comments came in a letter to Mel Stride, chairman of the Treasury committee, which is also investigating Greensill’s failure. David Cameron, Rishi Sunak and several top civil servants have been drawn into the scandal.
Greensill, a supply chain finance company, collapsed in March after its primary insurer, Tokio Marine, withdrew cover. This in turn triggered crises at Credit Suisse, which operated investment funds based on Greensill loans, and Sanjeev Gupta’s GFG Alliance, whose primary lender was Greensill.
The committee published a cache of documents that included texts and emails sent by Cameron, a Greensill adviser, to cabinet ministers and officials.
Rathi said the FCA was responsible for supervising Greensill in relation to anti-money laundering rules but it could pursue civil and criminal enforcement actions against companies that fell foul of the rules.
Lex Greensill, 44, founder of Greensill Capital, blamed Tokio Marine for the collapse. He countered accusations by Lord Myners, the former City minister, that the firm had “elements of a Ponzi scheme”. He told the committee: “A material portion of our funding is provided by investors who require insurance. Our principal insurance provider decided not to renew their insurance … it was that withdrawal of insurance capacity which resulted in our failure.”
Tokio Marine provided as much as A$10 billion (£5.5 billion) of insurance policies for Greensill. Tokio Marine declined to comment.