Lawsuit embroils IAG over Gupta’s Liberty Steel ‘$3b debt’
IAG allegedly agreed to insure billions of dollars in debts at Sanjeev Gupta’s steel companies despite increasing public concerns about his conglomerate’s rapid growth.
The insurance deal involved the Greensill supply chain finance group and was inked by an insurance agency in the final days of an agreement between IAG and that agency, court documents allege.
Sanjeev Gupta’s steel entities were entangled in the Greensill Group’s collapse. Glenn Campbell
The new Federal Court case raises more questions about how closely Sydney-headquartered IAG, one of Australia’s three major insurers, was monitoring risks signed up by insurance agency Bond & Credit Co.
Other similar ongoing cases have alleged IAG was on the hook for insurance of Greensill-associated debts toa company linked to Russian oligarchs or a Middle East health business that collapsed a year later. In this latest case, the administrator of collapsed Greensill Bank, based in Germany, has sued IAG and Bond & Credit, saying it is owed €2.18 billion ($3.56 billion).
This money should have been paid by companies of Liberty Steel, of which Mr Gupta is executive chairman, the administrator alleges. Any amounts not repaid should be recoverable under IAG’s insurance, it claims.
The agency, Bond & Credit, was crucial in helping fuel the rise and fall of the Greensill supply chain financing business, which collapsed spectacularly in 2021. Greensill companies provided financing to companies, with insurance covering the risk of non-repayment.
Creditors chasing insurance payouts have since filed multiple lawsuits against IAG and the agency. Insurance agencies such as Bond & Credit are organisations or people acting on behalf of insurers to sign customers and handle some
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