Ministers Take Control of Sanjeev Gupta Steel Group Amid Insolvency Crisis

Britain’s third largest steel producer has come under government control following a High Court decision that placed part of Sanjeev Gupta’s Liberty Steel group into insolvency. Speciality Steel UK SSUK, an employer of over 1,400 people across its Rotherham and Stocksbridge plants, saw a winding up order granted at the request of creditors, who are owed hundreds of millions of pounds by the business linked to Gupta’s GFG Alliance.

The official receiver, assisted by insolvency specialists from Teneo, has assumed responsibility for SSUK as it moves through compulsory liquidation. This unforeseen shift comes after the government proposed intervention amidst a protracted standoff over control between creditors and Gupta. Speciality Steel’s leadership has labelled the compulsory liquidation “irrational,” insisting they presented viable alternatives.

Efforts had been underway by Gupta to secure a more favourable insolvency arrangement, one that aimed to preserve his oversight of the business. Backed by heavyweight investors such as BlackRock and Fidera, Gupta had sought a pre pack administration deal which would allow SSUK to be acquired anew, free of legacy debts and tax liabilities running into the hundreds of millions. Legal representatives for Greensill, one of the leading creditors, asserted that Gupta’s scheme would in effect result in the assets being sold to a vehicle connected to Gupta himself.

Greensill’s previous collapse in 2021 remains a shadowy backdrop, its prior lending practices now subject to investigation by the Serious Fraud Office for alleged fraudulent dealings involving GFG. The official receiver, in line with statutory duty, is reviewing the events and decisions that led to the current financial predicament and will scrutinise the conduct of both current and past directors.

Charlotte Brumpton-Childs of the GMB union described the development as a further blow for the UK steel sector and South Yorkshire’s workforce, attributing difficulties to long term mismanagement by the owners. Yet there is a sense of opportunity for renewed government action to save what is considered a critical industry. The scenario draws parallels to when the government took over British Steel’s Scunthorpe operations earlier this year in a bid to prevent their closure.

Speciality Steel’s chief transformation officer, Jeffrey Kabel, described the move to liquidate as “irrational,” arguing that the proposal offered to the court would have protected jobs and introduced new investment into UK steelmaking. By contrast, compulsory liquidation is set to bring greater uncertainty and additional financial costs for taxpayers.

Correspondence shared in court from the Department for Business and Trade confirmed the government is not seeking to own SSUK or provide it with direct financial support, but the official receiver will oversee insolvency proceedings. Meanwhile, wages for employees are to be maintained by the liquidator, with the stated aim of securing a new owner to inject vital investment and working capital.