Greensill Capital hasn’t filed an Australian tax return for at least five years, say administrators, who recommend liquidation.
Greensill Capital hasn’t filed an Australian tax return for at least five years, say administrators, who recommend liquidation.

Push to wind up Greensill with debts of $4.9bn

Greensill Capital has not filed an Australian tax return for at least five years, according to the latest report from the company's administrators, who will next week recommend creditors vote to put the one-time financial services darling into liquidation with debts estimated at $4.9bn.

The report from administrators Grant Thornton, released overnight, says Greensill Capital's Australian staff should get the $2.2m in entitlements they are owed.

However other creditors - including Japan's SoftBank, owed $1.5bn - will have to wait for UK administrators to untangle Greensill's labyrinth financial affairs before they know whether they will receive any cash at all.

Grant Thornton said in the report that Greensill Capital has just $4 million in the bank and its four remaining staff are working out of temporary offices as administrators try to sell its sole remaining asset, fintech company Omni, valued at about $26m on Greensill's books.

The vast majority of Greensill's $4.9bn in debts relates to a contingent claim by the Association of German Banks, seeking to recover €2bn for refunds of depositors in Bremen-based Greensill Bank, also being wound up.

But Grant Thornton said this amount could be reduced if its administrators, which have won a freezing order over Greensill Bank's Australian assets, recover money from the sale of assets.

Earlier this year German regulators froze the bank's business, impacting €3.5bn of deposits.

Grant Thornton's latest report on the state of the financial services unicorn will be presented to creditors next week, along with a recommendation the financial services company be liquidated.

"We have recommended to creditors that the company be wound up, as we believe that it is the only suitable option available to creditors based on the information on hand at the time of issuing our report, the fact that no deed of company arrangement proposal was received, and given that the company is insolvent," Grant Thornton said in its report to creditors.

The report gives a fresh insight into the complex web of interrelated transactions between the Australian head office and its subsidiaries across the globe, confirming SoftBank pumped another $US440m into Greensill Capital in November, as clouds grew around its operations and relationships with Sanjeev Gupta's GFG Alliance.

Greensill's collapse was triggered by the March 1 lapse of key insurance policies covering its operations, and potential defaults by supply chain finance clients, but documents filed in Australian courts show that Greensill's insurers told the company in September 2020 they did not intend to extend the insurance coverage further.

The Grant Thornton report suggests the $US440m SoftBank loan was passed on to Greensill's UK operating company, and then to Greensill Bank.

The report also shows that Greensill Capital as well behind on filing annual tax returns to the Australian Taxation Office, and had sought additional time for its filings due to the complexity of the group's international operations.

"The ATO also advised of outstanding income tax returns for the years ended 31 December 2017, 2018, 2019 and 2020," the report says.

"We understand that the company had sought an extension to complete and file the income tax returns. The extensions were sought on the basis of a complexity arising with the Greensill Group structure and legal advice was being sought as to the necessity to group income of certain overseas subsidiaries."

Grant Thornton also confirmed the family trust of Peter Greensill, the brother of founder Lex, claims to be owed $78.5 million by the company, over a $US60m entered onto the company's books in October 2020.

Greensill Capital creditors will meet next week to vote on the liquidation of the company.

Originally published as Push to wind up Greensill with debts of $4.9bn