Hartlepool: MPs call for investigation into Liberty Steel 'red flags'

Sanjeev Gupta, CEO of the Liberty House Group, "put senior members of his staff in an unacceptable position", according to the report. Credit: PA

A series of 'red flags' in the running of Liberty Steel, employer of 250 people at a pipe works in Hartlepool, have been highlighted in a report released today (5 November).

The inquiry was launched on 27 April following the collapse of Greensill Capital, which called into question the government's approach to and support for the steel industry.

Since then, the Committee has been hearing evidence from various interested parties.

Greensill boss apologises for collapse of firm as watchdog launches probe

The group of MPs behind the report suggested ministers should reflect on the "systemic" risks to the UK steel industry posed by such 'unusual corporate structures' as those used by GFG Alliance, which owns Liberty House Group as a subsidiary.

In relation to Liberty Steel, the report notes a series of audit and corporate governance ‘red flags’ and concludes that:

  • Ministers should reflect on the systemic risks to the UK steel industry posed by such unusual corporate structures as those used by GFG Alliance

  • Liberty Steel owner, Sanjeev Gupta, put senior members of his staff in an unacceptable position by employing them with job titles associated with traditional executive functions in well run companies, without giving them the required access to information or decision-making powers necessary for them to perform their duties.

  • The regulatory authorities should undertake an investigation into King & King, the auditors of a number of GFG Alliance businesses, and

  • The Insolvency Service may wish to consider whether Mr Gupta has breached his fiduciary duties as a company director.

A spokesperson for GFG said the company takes notes of the findings, and will 'review and reflect upon its conclusions'.

The government select committee behind the review into what it describes as a 'crisis hit' industry, is calling for more support - saying it cannot continue without it.

Issues it says need tackling include high energy prices and barriers to supplying steel for major public projects.

The report added that the Government lacks a clear road map for decarbonising steel, to which a spokesperson responded: "We are working closely with the sector to support its transition to a low-carbon future in a way that supports competitiveness, jobs and clean growth."

Community, a union representing steelworkers, wants to see action follow the report's findings. Credit: PA Images

While welcoming the report, the steelworkers' union Community says how government now responds is the most "important test".

"The industry can have a bright future but we need Government to back us", Operations Director Alasdair McDiarmid said. "This means delivering a long-overdue steel sector deal and taking urgent action on exorbitant energy prices."

  • Gavin Stace, director general at Steel Works UK.