Australian regulators are investigating governance issues related to the Greensill parent collapse
Australian regulators are currently investigating corporate governance issues related to the collapse of Greensill Capital’s parent company in the country, which the local administrator said had attracted more than $ 4 billion in claims from creditors.
Asic, Australia’s corporate regulator, told the country’s parliament on Friday that it has been investigating Greensill Capital Pty, the Australian parent company of Greensill Capital, based in London, since November. It said it was also working with regulators to understand if Australian insurers QBE and Insurance Australia Group, as well as Japan’s Tokyo Marine, were affected by the collapsed supply chain finance firm.
Karen Chester, Asic vice chairman, said Greensill’s business model had become “extremely risky” as the company expanded and that there would be an impact on Australia after last week’s collapse, including the suspension of supply chain financial services. With Greensill owned by Australian Lex Greensill, Asic would be investigating further issues, she added.
“There are some corporate governance issues that may be in our jurisdiction that we will be looking into,” Chester said, noting that some investment banks were sponsoring a potential IPO for Greensill late last year.
Chester, whose comments were first published by the Australian Financial Review, said the regulator is investigating any potential involvement of local insurers that have provided Greensill credit insurance to protect it from customer default.
QBE said in a statement Friday that it had “no direct exposure to greensill”. IAG, which refused to comment, previously said it had no “Net insurance exposure“To Greensill, who passed on its risk to Tokyo Marine in 2019 as part of the sale of its 50 percent stake in the Sydney-based insurance company Bond & Credit Co. Tokyo Marine has questioned whether the insurance policies at the heart of Greensill’s business model were valid. Tokyo Marine declined to comment on Chester’s remarks.
The regulatory review of Greensill’s collapse came when Administrator Grant Thornton notified creditors that Japanese SoftBank had filed a $ 1.15 billion claim against Greensill Capital, the holding company for Greensill’s UK operations .
Two people attending the meeting told the Financial Times that Credit Suisse had filed a claim for $ 140 million, although the administrator was investigating whether any part of it had already been repaid. The Peter Greensill Family Trust, a family trust benefiting from founder Lex Greensill, filed a $ 60 million claim in October 2020 for a loan that was granted to the company in October 2020.
The IAG filed a lawsuit for A $ 22,000, which was awarded after Greensill’s failed legal effort earlier this month Force renewal of his insurance. Tokyo Marine also made a $ 1 claim, meeting attendees said.
Matt Byrnes of Grant Thornton informed the creditors that the Association of German Banks had advanced a contingent claim of 2 billion euros. The claim relates to future federal deposit insurance claims following the collapse of Greensill Bank AG, a subsidiary of the country that declared bankrupt earlier this week, a person said at the meeting.
James Roland, a partner at Gadens, a Sydney-based law firm, said contingent creditors typically filed claims with administrators for voting purposes and to strengthen their position during the administrative process.
“This is because contingent claims are inherently uncertain, as the debtor company only has an actual debt to the creditor if a specific event (such as the emergency) occurs,” he said.
Byrnes told creditors that Greensill’s Australian parent company has limited cash in its bank accounts and the company has a claim of nearly $ 800 million.
The meeting lasted just under an hour and was attended by 59 creditors and their representatives. The meeting was attended by representatives from Asic, the Australian Attorney General and the Tax Office. A representative of the Association of German Banks also took part.
Additional coverage from Ian Smith in London