Greensill Scandal Archive
3rd May
2020
2020
Cameron texts Sunak, but he's in 'back-to-back' meetings. Cameron also contacted two MPs/Ministers under Rishi's team: John Glen and Jesse Norman. Cameron also calls special adviser Sheridan Westlake, and sends a follow up email:
Sheridan. Great to talk. Here are the bullet points I promised. What we most need is for Rishi to have a good look at this and ask officials to find a way of making it work. It seems nuts to exclude supply chain finance. We all know that the banks will struggle to get these loans out of the door — and so other methods of extending credit to firms become even more important. All good wishes DC.
● Greensill is a significant UK employer and its most valuable fintech [financial technology business], and we are keen to use our technology to help in this time of national crisis.
● We delivered £120 billion in credit to 2.6 million SMEs [small or medium-sized enterprises] in 175 countries last year — and are growing at more than 100 per cent per year.
● The Covid crisis has caused a very sharp increase in the demand from SMEs for liquidity — at the same time as many banks and investors are standing on the sidelines.
● Greensill applied to the Covid Corporate Financing Facility (CCFF) to help it meet demand. HMT said “no” — apparently because the CCFF is to provide direct liquidity to non-financial corporates making a material contribution.
● All Greensill does is provide direct liquidity to non-financial corporates who make a material contribution to the UK economy — indeed we go one better and deliver liquidity directly to more than 100,000 SMEs in the UK today ... to pay invoices quickly that are generated by UK businesses in the real economy. Funding raised against invoices issued to large companies goes directly into the supply chain at every level, rather than to the big corporates.
● Our application conforms with all the conditions of the facility other than it has a securitisation company issuing the commercial paper rather than the finance subsidiary of Vodafone/NHS etc.
● In fact, the BoE [Bank of England] purchased identical supply chain finance paper in the financial crisis, so the precedent is there. Recall Andrew Bailey [governor of the Bank] has spoken of the unique importance of supply chain finance in this time of great economic [unclear].
● Surely HMG should be seen to be supporting UK fintechs — who are creating employment, driving innovation and already delivering billions in ultra low-cost liquidity to British SMEs — particularly when it has been proven.
● Allowing a securitisation company that issues qualifying commercial paper to access the facility does not create a bad precedent — it is one that a number of fintechs, like Greensill, could instantly use to help deliver cash to SMEs.
● Greensill (and fintechs like it) have the scale, technology, UK-based staff and capability to get credit — in scale — into the hands of UK SMEs in days.
Our ask is that you direct officials to work with Greensill to ensure the eligibility criteria are met — we are prepared to be flexible, but we need to work at speed. A failure to do so will, almost certainly, mean tens of thousands ... Greensill (and other fintechs) have to materially reduce their activities.
Source: Daily Mail
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huge credits 🏆 to The Sunday Times and Financial Times for uncovering this scandal:
Gabriel Pogrund John Collingridge Robert Smith Jim Pickard Cynthia O’Murchú Michael Pooler
Gabriel Pogrund John Collingridge Robert Smith Jim Pickard Cynthia O’Murchú Michael Pooler
