Greensill Director Ban
Lex Greensill disqualified for nine years as director following Greensill Capital collapse
Anonymous
Britain’s Insolvency Service has disqualified Lex Greensill, founder of Greensill Capital, from serving as a company director in the UK for nine years after he accepted a disqualification undertaking. The move follows the 2021 collapse of Greensill Capital, whose liabilities exceeded £1.6 billion after key trade-credit insurance coverage was not renewed. According to the regulator, Greensill caused or allowed transactions in late 2020 involving the US construction firm Katerra that removed legal protections supporting a Credit Suisse fund’s investment and were carried out without required written consents. The Insolvency Service also said Greensill allowed $440 million received in November 2020 to be used for purposes other than redeeming notes owed to the Credit Suisse fund, contributing to later defaults and losses. The ban, which bars him from participating in company management activities without court authorization, is set to begin June 23 after the planned June 8 trial was canceled.
Key Points
1
Britain’s Insolvency Service chief executive Duncan Beach said the “extensive ban” reflects “the severity of Greensill’s misconduct,” describing it as conduct involving “failing to exercise reasonable care, skill, and diligence.”
2
The Insolvency Service said Greensill was a director of three entities in the Greensill Group: Greensill Capital (UK) Limited, Greensill Limited, and Australian parent Greensill Capital Pty Limited.
3
Regulators said the late-2020 Katerra transactions did not just remove “legal protections,” but effectively meant the receivables no longer required payment, the security held against those receivables was released, and the payment obligations supporting the Credit Suisse fund’s trade credit insurance were cancelled.
4
The UK disqualification notice described how Greensill Capital’s financing worked: it provided accounts receivable financing funded through the creation and sale of security-backed “notes,” which were bought by the Credit Suisse (Lux) Supply Chain Finance Fund and relied on trade credit insurance.
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