Bankruptcy of UK fintech startup Greensill Capital grows into scandal

British fintech startup Greensill Capital on March 8 filed an application to the UK Companies House for protection from creditors, Report informs, referring to The Wall Street Journal (WSJ).

Experts are confident that this bankruptcy will cause problems for a number of large financial companies, such as Credit Suisse and SoftBank, as well as the British and German authorities, who kept their funds in the accounts of the startup.

В настоящее время Greensill ведет переговоры с инвестфондом Apollo Global Management о продаже ему части своих операций и передачи клиентов. По данным WSJ, в борьбу за активы и клиентов Greensill также вступил крупнейший в США банк JP Morgan Chase.

Greensill’s troubles began last summer when Australian insurer Bond & Credit Company decided not to renew Greensill’s loan insurance. The startup tried to obtain through the court the extension of the insurance program, which ended on March 1, 2021, but lost the trial. As a result, the company filed for insolvency protection in Australia last week. Upon learning of Greensill’s troubles in Australia, German financial regulator BaFin launched its own investigation into the startup’s banking arm in Bremen. The regulator soon found out that the bank was systematically manipulating its financial statements. Last week, BaFin imposed a moratorium on Greensill Bank’s operations.

One of the main investors in the company was the Japanese corporation SoftBank, which had invested almost $2 billion in the Australian startup of Lex Greensill. In addition, former British Prime Minister David Cameron was a consultant to the startup. Credit Suisse, which operates a number of assets that bought securitized loans from Greensill, was one of the company’s main clients. The total value of these assets is about $10 billion.

Greensill is in talks with Apollo Global Management to sell part of its operations and transfer clients. According to the WSJ, JP Morgan Chase, the largest bank in the US, has also entered the battle for Greensill’s assets and clients.