With plenty to occupy us with at home, many South Africans missed the collapse of Australian banker Lex Greensill’s creation that was directly responsible for the creation of Europe’s fourth largest steel company. Greensill and his associate Sanjeev Gupta (now in Dubai, go figure) cost their backers billions, aming them Japan’s Softbank which has written off $1.5bn.
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The house of cards was collapsed by German authorities after investigators discovered Greensill’s Bremen-based bank had advanced funds to Gupta’s steel company on fictitious invoices. After Credit Suisse pulled a $10bn credit line, the implosion took under a week. The 35 000 workers in Gupta’s quickfire steel and aluminium empire are now praying for a miracle.
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Greensill marketed itself as a provider of “supply chain funding”, a new age title for factoring – sale of discounted invoices by the cash strapped. Its business model was similar to Mauritius-registered, SA-based Barak Fund Management established in 2009 by former RMB and Standard Bank executives Jean Craven and Prieur du Plessis (click on graphic above for more detail.)
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Bloomberg reported this week that SA-based Barak sent its investors a letter requesting their support for liquidation as 54% of the fund’s $4bn in assets are now “illiquid”. PwC resigned as Barak’s auditor last year. Investors, many from SA, have injected over R15bn into Barak. Once again, it’s only when the tide goes out that we see who has been swimming naked.
- PS Barak’s Prieur du Plessis is NOT the well known founder of Plexus, who tells me it’s a popular moniker in the clan because “it was the name of the first Du Plessis French Huguenot who arrived on our shores in 1688.” Du Plessis, the repected one, is a BizNews Premium subscriber. Naturally.
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