Lex Greensill’s fraud and “conspiracy” with commodities tycoon Sanjeev Gupta should prevent the financier’s collapsed bank from making a $400 million claim, Zurich Insurance Group said in a London lawsuit.
Greensill Bank AG’s administrators sued Zurich to recoup losses of about $274 million incurred on debt the bank acquired from a Credit Suisse subsidiary as well as about $127 million for non-payments by Gupta’s Liberty Commodities Ltd.
The insurer countered in a recent court filing that Greensill’s almost daily interactions and business arrangements with Gupta and his companies should mean Zurich doesn’t have to payout.
Related: Greensill Sues Zurich Insurance for $400 Million to Recoup Losses
Gupta’s GFG Alliance controlled companies received long term unsecured loans from Greensill, which were misrepresented as short-term financing based on accounts receivable, lawyers for Zurich said in the Jan. 26 High court filing dated.
“In fact, there were no genuine accounts receivable owed to Liberty and financed by Greensill,” they said.
Lex Greensill “wholly rejects” the allegations and are “without any foundation and will be addressed robustly when he files his defense and any counterclaims,” his spokesman said in an emailed statement.
The lawsuits against the insurer came in March last year on the heels of a separate London suit by Credit Suisse against the bank and its administrator over the lost funds.
“GFG Alliance was not involved in any insurance arrangements, which Greensill had in place, and any attempt to link us to the Greensill insurance is misplaced,” a GFG Alliance spokesperson said in a statement.
Spokespeople for Greensill Capital’s administrator and Zurich declined to comment. An email to spokespeople for Greensill Bank’s administrator remained unanswered.
Photo: Lex Greensill during a live steam hearing. Photographer: Chris J. Ratcliffe/Bloomberg
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