A leading customer of Sanjeev Gupta’s Liberty Steel has fallen into administration, deepening the crisis engulfing the industry in the UK and prompting speculation the industrialist may step in to rescue the business.
Aartee Bright Bar, which is owned by Ravi Trehan, a close associate of Gupta, is Britain’s largest distributor of engineering steel products.
It buys steel bars, mainly used in the construction industry, from Liberty Steel. Based in the West Midlands, the company employs 250 people.
Alvarez & Marsal were appointed by Aartee’s main creditor, FGI Worldwide, to handle the insolvency process this week, according to a person familiar with the situation. FGI declined to comment, while Aartee was unavailable.
Michael Magnay, joint administrator at A&M, said: “Like many companies in its sector, Aartee Bright Bar has been going through vital headwinds on account of the difficult financial surroundings and fluctuating metal costs.
“Against this backdrop, administrators have been appointed and we are exploring the options available to preserve value.”
Liberty Steel declined to comment but a person familiar with the situation said the company would “look at ways in which it could help”.
Sky News earlier reported the appointment of A&M.
The Financial Times has previously reported that Aartee’s owner Trehan has longstanding ties with Gupta, whose GFG Alliance owns Liberty Steel.
The 64-year old Indian businessman was previously listed as one of the four members of GFG’s “strategic board” and met with Scottish government officials in this capacity. Trehan also used to own a stake in Gupta’s metals trading outfit Liberty Commodities.
Trehan’s trading business Aar Tee Commodities was one of eight companies linked to Gupta that received taxpayer-backed Covid-19 loans in 2020 through finance company Greensill Capital, which collapsed in 2021.
The UK government last year withdrew guarantees on these £400mn of loans after an investigation found a “number of breaches” of lending rules.
Aar Tee Commodities, which is a separate business to the group’s West Midlands manufacturing operations, was dissolved last year, according to a filing at Companies House.
The taxpayer-backed Covid-19 loans are one area that the UK’s Serious Fraud Office is examining as part of its probe into “suspected fraud, fraudulent trading and money laundering” at GFG. GFG has always denied any wrongdoing.
Source: Financial Times
