Operations were frozen at Greensill Bank after Germany’s Federal Financial Supervisory Authority (BaFin) filed a criminal complaint against the financial startup, the Financial Times reported on Wednesday (March 3).
The German financial watchdog reportedly discovered balance sheet irregularities during a forensic audit of Greensill Bank, according to sources, per FT. The audit was conducted by KPMG at the request of BaFin. The criminal complaint was filed in Bremen where the bank is based and accuses it of balance sheet manipulation.
SoftBank Vision Fund invested $1.5 billion into Greensill Capital in 2019. The financial startup was advised by David Cameron, former British prime minister.
According to a BaFin press release, Greensill Bank had no evidence of receivables on the GFG Alliance Group balance sheet it acquired. That fact prompted BaFin to take “extensive measures to secure the bank’s liquidity” and to curtail risks.
A moratorium was ordered to secure the bank’s assets, which totaled about 4.5 billion euros at the end of last year.
According to the release, Greensill Bank is a refinancing institution for the Greensill Group and also invests in “working capital solutions products” created by affiliate firm Greensill Capital (U.K.) Ltd.
The Greensill Group offers industrial firms short-term supply chain financing, also known as reverse factoring. Greensill Capital Pty Ltd. in Australia is the parent company of Greensill Bank AG, which falls under the supervision of BaFin.
Credit Suisse froze Greensill’s $10 billion in investment funds in part due to the bank’s exposure to British steel entrepreneur Sanjeev Gupta. Grant Thornton is assisting Greensill with a possible restructuring and could soon seek insolvency. Apollo Global Management is also looking into buying the company for about $100 million.
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