For years, the rise of the Bundaberg farmer’s son turned London banker seemed unstoppable. Then things started to fall apart. By Rick Morton.

Lex Greensill: Why the green energy backer lost his billions

Lex Greensill.
Lex Greensill.
Credit: Nine / Peter Braig

Lex Greensill started the week as a billionaire. Within days, the boy from Bundaberg had lost his empire.

The collapse of his fortune is, in part, explained by close links to Australia’s biggest renewables investor, Sanjeev Gupta. And as such, Greensill’s trouble may drag down Gupta’s global empire, with jitters already spreading to the 1200 workers at South Australia’s Whyalla steelworks, which was purchased by the Gupta Family Group (GFG) Alliance in 2017.

The Financial Times reported that about 60 per cent of all the loans made by Greensill’s company were to GFG Alliance, a staggering figure given the company claimed to have issued $140 billion in financing in 2019 alone.

But there is much about both the Greensill story and business model that doesn’t quite add up, as auditors at Germany’s financial regulator BaFin have found.

Greensill specialised in what the business world calls “supply-chain finance”, a burgeoning sector in which companies use technology to provide lower-cost finance to buyers and sellers. It addresses a common problem in industry: that small- and medium-sized businesses, in particular, are at the whim of bigger companies that often pay invoices late, or at the last possible minute.

The Greensill vision, inspired by experiences on his family’s farm in Queensland, was that if there’s a competent middleman covering the debts, suppliers can get what’s owed to them sooner and the bigger players can take time to pay their bills.

Greensill made his money as this middleman.

In simple terms, it worked like this – say a big company owed millions of dollars to its suppliers. Ordinarily this debt needs to be paid within a set period. But here Greensill would step in, get a line of cheap credit, buy the company’s debt for a value less than what it owed and pay the bills on time.

Greensill would take his cut by repackaging the debt into securities, a financial instrument that could be sold on to other investors. In theory, this can tick along untroubled, unless of course the credit evaporates.

What Greensill ended up doing was analogous to what happened during the subprime mortgage crisis that spawned the global financial crisis – he took these supplier debts and rebranded them as investment funds.

In a post-GFC world of low-interest rates, investors scrambled to find yield from a product outside traditional avenues. And so, for a time, Greensill was fawned over by the business press – the country lad made good.

But then last Monday, administrators were appointed to Greensill Capital Limited and its related management company in London. They in turn appointed voluntary administrators for Greensill Capital Pty Ltd in Australia, noting it is the parent company for the British arm but “operates only in a limited capacity”.

The plan was to sell off viable parts of the business to United States private equity firm Apollo Global Management. On Thursday, though, even that last-minute salvage mission appeared embattled.

Greensill himself went from being worth about $6 billion – a measure of personal value he once declared “asinine” – to practically nothing.

As with most stories of finance gone wrong, the Greensill–Gupta saga is really a tale of overextension. Too many moving parts, too many elements that must remain just so to keep things stable.

In the end, only one thing needs to go wrong.


The trouble began, quietly, in mid-2020, when a handful of Alexander “Lex” Greensill’s insurers refused to extend cover for $A6 billion worth of working capital facilities.

Insurance giant Tokio Marine & Nichido Fire Insurance Co Ltd and its subsidiary BCC advised Greensill in July that it would no longer be providing cover.

This move felled the first domino.

On March 1, 2021, Swiss bank Credit Suisse froze $13 billion worth of investments in four funds that had purchased debt products from Greensill. It was a decision months in the making.

About the same time, Germany’s federal financial supervisory authority BaFin was quietly investigating Greensill’s German arm, Greensill Bank AG, for accounting irregularities. Inquiries were launched after the Auditing Association of German Banks complained to the watchdog last year.

On March 3, BaFin broke its silence, immediately banning Greensill Bank AG from disposing of assets or taking payments due to an “imminent risk that the bank will become over-indebted”.

“During a special forensic audit, BaFin found that Greensill Bank AG was unable to provide evidence of the existence of receivables in its balance sheet that it had purchased from [Sanjeev Gupta’s] GFG Alliance Group,” the regulator said in a statement.

“For this reason, BaFin has already taken extensive measures to secure the bank’s liquidity and to limit risks for Greensill Bank AG and has appointed a special representative for the bank.”

Privately, Lex Greensill must have known his fast-growing and disruptive company was in for a battle. Last year, his company’s fleet of four private jets, including a $50 million Gulfstream, were all put up for sale.

As recently as December though, the businessman was still spruiking a plan to take his company public.

“The only reason we are raising capital is the demand we see,” he told The Australian in December, pointing particularly to the company’s Earnd app, which allows employers to give staff access to their wages during a pay cycle at no charge. “Otherwise we are very profitable and generate strong free cashflow.”

At that stage, Greensill was trying to gather more than $A800 million as part of a “pre-IPO” capital raising project.

Greensill, whose family has worked prime agricultural land in Bundaberg since 1947, has always been something of a charismatic figure.

Those who run in Australian business circles say little else explains his meteoric rise among the elite of the famously impenetrable British upper crust.

“So, there’s a bit of family money. But how on earth does this man from regional Queensland get this mid-range banking job in London that he seems to have accidentally walked into?” one Australian businessperson tells The Saturday Paper.

“That, to me, is the missing piece … And the key element is that a lot of people take off to London or New York, many for legitimate reasons, but also because it allows a certain type of person to reinvent themselves. To craft their own image.”

Greensill was certainly skilled in the art of reinvention. After a brief stint in a local Bundaberg solicitor’s office, he was suddenly a London banker. Then in 2011, he established the namesake company after roles with Morgan Stanley and Citibank.

Within six years of this launch, Greensill was awarded a membership of the title Commander of the British Empire during the 2017 Queen’s Birthday Honours awards. This honour is one rank below Knight Commander, which allows its beneficiaries to use the title sir or dame.

In London, Greensill also managed to sell himself as an adviser to then British Prime Minister David Cameron. The role was brokered through a chance encounter with Jeremy Heywood when Greensill was a junior banker at Morgan Stanley in 2001.

Heywood took a shine to the young Greensill, who had only just left Australia, and boosted his profile when Heywood returned to the public fold as head of Her Majesty’s Home Civil Service, which runs the administration of the British government. Heywood was in this key role from 2014 to 2018, perfectly timed for the rise of Lex Greensill.

In 2018, Greensill flipped the tables and offered David Cameron a job at the company as an adviser. Australia’s former foreign minister Julie Bishop took up a role after politics as strategic adviser and chair of Greensill Asia Pacific.

Of course, much of this was just an exercise in clever public relations.

Lex Greensill said the company would “draw on Julie’s unparalleled experience and expertise – particularly her international credentials cemented during five years as Australia’s foreign minister”.

But this week, once the company had imploded, Bishop clarified that she is “not a director or member of the Greensill Capital board”.

“Julie Bishop and Partners provides advisory and consultancy services to Greensill Capital,” she said.


In maritime folklore, there is a belief that anyone close enough to a sinking ship will be dragged down with it. In business, it’s almost a guarantee.

Early on Thursday morning this week, Credit Suisse told staff its European head of asset management and two staff who oversaw Greensill’s funds had been removed “for the time being” over perceived failures in oversight.

However, perhaps the biggest casualty, so far, is the sprawling enterprise of Sanjeev Gupta.

Born into a family of industrialists in Punjab, India, Gupta is now facing a mammoth task of refinancing his empire in the wake of Greensill’s collapse. The once close relationship between his interests and Greensill’s is now the subject of at least one lawsuit, although many more are expected to be filed.

In British court filings, Greensill said that Gupta’s businesses were facing “financial difficulties” and alleged Gupta had defaulted on debt owed to the company.

Gupta told union officials there that this was not true, while conceding that money needs to be shifted around.

“We have adequate funding for our current needs while we bridge the gap to refinancing the business,” he said.

“We had been preparing to refinance the business to diversify away from Greensill and broaden our capital base.”

Gupta owns the Whyalla steelworks in South Australia and had purchased ZEN Energy from Ross Garnaut to pump out a $1 billion pipeline of renewable energy projects. ZEN Energy was sold back to Garnaut last year.

The 280-megawatt large-scale Cultana solar farm, developed on vacant land north of Whyalla, remains with Gupta.

Reports have suggested almost 7000 Australian jobs could be on the line if things go particularly sour. But at this point even South Australian Premier Steven Marshall is inclined to believe Gupta’s optimism about the potential to refinance.

This positive outlook marks a departure from the company’s position as outlined in a February 7 letter tendered to a British court, which warned GFG Alliance would collapse into insolvency if Greensill stopped providing it with working capital.

That credit crunch has now come to pass.

“We are working with unions within the sector to focus on making sure these workers’ entitlements are not at risk,” Steve Murphy of the Australian Manufacturing Workers’ Union said in a statement on Wednesday.

His South Australia state secretary, Peter Bauer, said the AMWU is “seeking urgent discussions with high-level executive management” to be briefed about the future operations of the Whyalla steelworks.

The website for Greensill’s global business once proudly told the story of a farming son from Bundaberg on a mission to “make finance fairer”. Once the administrators took over, however, the various personal profiles and caches of glowing media coverage on the website have all been removed.

Page not found, it now says, over and over again.

This article was first published in the print edition of The Saturday Paper on March 13, 2021 as "Lex Greensill: Why the green energy backer lost his billions".

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