Greensill Capital (Greensill), the now-collapsed supply chain financial group, lobbied Australian Treasury officials amid the COVID-19 crisis, seeking their UK counterparts to provide access to government-backed emergency loans as Australian insurers withdrew from the trade credit market, according to reports.
According to the Treasury, Greensill organised a conference call – scheduled to last 45 minutes – on April 02, 2020 with Treasury head of financial system division James Kelly, adviser Aidan Storer, and the department’s macroeconomic adviser Ian Beckett.
The Treasury redacted the names of the Greensill employees who joined the conference call from Freedom of Information (FOI) documents outlining the meeting. However, it included the managing director of the firm’s local asset distribution business.
The Treasury has not yet clarified whether Lex Greensill attended the meeting. However, Meghan Quinn, the deputy secretary of the Treasury’s macroeconomic group at that time, confirmed that she was notified of the conference call.
According to the Australian Financial Review (AFR), several conference calls were held over a few months during the COVID-19 pandemic to explain how Greensill’s distribution business worked.
Greensill had been lobbying to participate in the Treasury’s loan schemes and wanted to sell its clients’ invoices directly to the government. However, the Treasury informed the firm that it did not qualify to join the calls, adding that it raised issues “that have nothing to do with Treasury.”
A Treasury spokeswoman told AFR that it had “nothing further to add to the FOI documents.” Meanwhile, Treasurer spokesman Josh Frydenberg declined to comment.
In May 2020, the UK government launched a trade credit reinsurance scheme to provide government guarantees of as much as £10 billion to help maintain trade credit insurance during the pandemic. Germany, France, and Canada also launched a similar scheme, but the Australian government did not.
As part of the scheme, UK taxpayers are now believed to be exposed to bad Greensill debts, according to AFR. It also reported that former British prime minister David Cameron, who became a senior advisor to Greensill Capital in mid-2018, used his government contacts to try to get cheap loans for the firm from the UK’s COVID-19 emergency fund.
In a UK inquiry into the Greensill collapse, documents showed that Cameron and his staff sent ministers and officials 45 emails, texts, and WhatsApp messages concerning the supply chain financial group between March 05 and June 26, 2020. The messages included notes to Sir Tom Scholar, the permanent secretary of the UK Treasury, on April 03, stating that Greensill was not included in the government’s COVID-19 Corporate Financing Facility that provided bridging loans for companies hit by the pandemic.
