Sanjeev Gupta’s finance chief is to quit after only 18 months in the job as the embattled steel tycoon hires crisis experts in a desperate bid to save his empire.
V Ashok, chief finance officer of GFG Alliance since October 2019, said he is stepping down for personal reasons and will be replaced by Dubai-based executive Deepak Sogani.
His surprise exit comes alongside the appointment of three new board directors to help GFG subsidiary Liberty Steel stay afloat after the collapse of its lender Greensill Capital, with thousands of British steel jobs hanging in the balance.
Staff are understood to have been told that Mr Ashok resigned to be with his family in India. The Covid outbreak in the country and associated travel restrictions meant he was unable to continue in the job.
Mr Gupta’s board is being beefed up by turnaround expert Jeffrey S. Stein, who will be chief restructuring officer; Jeff Kabel, a former JP Morgan banker and former chairman of the International Steel Trade Association, who will be chief transformation officer; and Iain Hunter, the former head of Mr Gupta’s bank Wyelands, who will be chief governance officer.
The shake-up follows weeks of speculation about the future of the company, which owes billions of pounds to Greensill and is fighting to stay afloat. GFG owns a raft of operations in the UK including a major steel plant in Rotherham.
Liberty Steel said: “The appointments represent a step forward in Liberty’s response to the collapse of its principal lender, Greensill Capital.
“Liberty is prudently managing cash across its global operations to ensure it has adequate funding for its current needs while its refinancing is completed.”
The boardroom shake-up was coupled with an announcement that Mr Gupta had struck a new funding deal for his company’s Australian operations, on the eve of a court case to wind up the businessman’s operations in the country.
White Oak Global Advisors, a Californian investment firm, is said to have provided the financing. The company’s UK arm claims that its aim is to “eliminate[s] unnecessary paperwork, policies, and processes from our business, so we can offer you fast, convenient business finance”.
Credit Suisse had filed legal action to wind up Mr Gupta’s mining operations and steelworks in Australia to recoup losses relating to invoices that were packaged up by Greensill Capital and sold to the Swiss lender.
Whyalla, in South Australia, was facing an uncertain future because of the legal action. Mr Gupta’s steelworks is the city’s main employer and its collapse would have disastrous repercussions.
Steven Marshall, the premier of South Australia, said: “Sanjeev Gupta has often told me he regards Whyalla as his ‘spiritual home’ and I am sure his faith in the future of the city and the steelworks has driven his determination to seek this second refinancing of the operations.”
The company said: “Liberty is making good progress with refinancing – Liberty Primary Steel and Mining Australia has today agreed terms to refinance its Greensill exposure.
“Record steel prices and Liberty’s operational improvement programme have enabled its core businesses to maintain their strong performance since the beginning of the year.”