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The capital is trailing rivals in the race for big IPOs — but new recommendations divide opinion

When Britain’s investment minister met with leading global investors a few months ago, he was given a very clear message about the attractiveness of the UK stock market.

“They said that they felt London had lost its crown,” says Lord Gerry Grimstone, the former chair of Standard Life Aberdeen, who now oversees inward investment for the British government. “We had just lost our edge to others.”

Grimstone was not hearing anything that would have surprised many investors or company bosses. In recent years, London has fallen behind other international listing venues, such as New York, in the battle to attract the biggest and brightest companies

Since 2008, the number of companies listed on the UK market has dropped by about 40 per cent and, between 2015 and 2020, London accounted for only 5 per cent of initial public offerings of shares. Its stock market has become dominated by financial or “old economy” companies, critics say, rather than the fast-growing tech firms that ministers see as the future. 

To address the problem, the government asked former EU commissioner Lord Jonathan Hill to carry out a review of the market, and he issued a series of recommendations in February.

These include allowing dual class share structures in the London Stock Exchange’s premium listing segment — enabling company founders to have enhanced voting rights on big decisions — and reducing the minimum proportion of shares in “free float” and easily tradeable on the market from 25 per cent to 15 per cent.

Other proposals include a review of the requirements for company prospectuses and liberalising the rules on special purpose acquisition companies (Spacs).

Hill said the measures would simplify and streamline processes, and encourage a more dynamic regulatory regime. He argued that the review would simply bring London in line with other well-regulated financial centres in the US, Asia and Europe.

Grimstone, who spent the past two decades as a leading investment banker before taking the government role last year, believes the reforms are much needed.

“I want London to be the place that people choose to continue to list,” he says. “This is such a competitive environment at the moment that everything needs to be humming in order to make sure we attract the maximum amount of investment from overseas.”

Many investors have also welcomed the proposals. Rory Bateman, head of equities at Schroders, says that the reforms give London a chance to reclaim the number one spot as a financial capital. 

Bateman helped Schroders float an investment trust on the London Stock Exchange in the autumn but says the regulatory and other barriers encountered were “incredibly high” and broadly “detrimental to companies coming to the market”.

“We have lost the entrepreneurial edge [of] when I joined the City 20 years ago,” Bateman says, adding that the reforms would help create “a fair and level playing field” with other financial centres.

But there are still some doubts about whether London will be ready to compete with New York for some of the most high-profile IPOs as many fast-growing tech companies are initially loss making. Investors in London are seen by many bankers as preferring to back companies that can pay a dividend income out of their steady profits.

April’s disappointing flotation of Deliveroo in London was also seen as a blow, with some worrying it will make it harder to attract companies seeking the high valuations associated with New York listings. When shares in the food delivery business began trading, almost a third was wiped off their value within an hour.

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Anand Sambasivan, chief executive of PrimaryBid, which allows retail investors to participate in IPOs, says rule changes alone will not change investor appetite. “While the listing reforms give issuers options about the wrapper in which they come to market, the basic job of presenting your equity story clearly and finding willing buyers hasn’t changed,” he points out.

Nevertheless, Sambasivan believes that some of the more technical proposals, such as greater flexibility around financial track records, are important for the future of the London market.

“These have been essentially unchanged for 30 years — they don’t necessarily reflect what investors are willing to base their decisions on, and aren’t always meaningful for higher growth businesses coming to market,” he says. 

Others question whether the reforms are as essential as ministers claim. London has seen a surge of IPOs in recent months, including several prominent tech-based businesses. Bankers say that the pipeline looks healthy for the rest of the year. 

PensionBee, the online pension provider, floated on the London stock exchange last month with a distinct lack of fuss, compared with Deliveroo. Its shares still trade about 10 per cent above their flotation price. PensionBee chose to enter the high-growth segment of the market, which allowed it to reduce its free float to 10 per cent without the need for reforms.

Romi Savova, founder of the business, says that options “are already there for companies at all stages of their growth”. She worries that the reforms are “driven by the venture capital sector, rather than what many other stakeholders within the economy want to see from companies that operate in the public sector”.

Savova argues that London would be wrong to lose its investor safeguards in a push to attract new companies, and suggests regulators should instead bring in new rules to attract retail investors and raise standards around ESG. London’s corporate governance rules are there to protect investors, she says, and should apply equally to high-growth as well as to more mature companies.

One example cited by Savova is London’s longstanding policy of “one share, one vote” — which is under threat from the proposals to allow dual class shares that allow founders more voting power.

“What I hear a lot of is, ‘Amsterdam is doing it, other places are doing it’,” Savova says. “I have small children. If someone tells me what all the other children are doing, it doesn’t necessarily mean that you should do it too.”

Paris’s history updated for the present at the Musée Carnavalet

After five years of closure and a €55m refit, the often overlooked museum reopens with new spaces covering the past century

There will be plenty of unfamiliar sights when the Musée Carnavalet, which is devoted to the history of Paris, reopens on May 29 after a five-year renovation. One of them feels especially significant: when visitors reach the rooms devoted to the French Revolution, they will no longer be greeted by a portrait of Louis XVI. The French king has been replaced by a painting of the 1789 Declaration of the Rights of Man and of the Citizen, the era’s key civil rights document.

The change of perspective was made possible by a complete overhaul of the museum, carried out with accessibility and coherence in mind after a century and a half of haphazard expansion. The City of Paris bought the main building, a 16th-century hôtel particulier in the chic Marais district, in 1866. The goal was to house its collections as well as archaeological finds and items donated by the public, but they grew so large that the overall space quadrupled over time. In the 1960s a second, adjacent hôtel was attached to the Carnavalet to accommodate it all. 

That made visits somewhat chaotic: before the museum closed in 2016, prehistoric discoveries were situated just steps away from Napoleon-era ornaments. “The renovation allowed us to rethink the pathway from start to finish, in chronological order,” says Valérie Guillaume, the Carnavalet’s director since 2013. The scale of the project was such that she says she hardly had time to miss the visitors: “There was just too much to do.”

The result is elegant rather than showy. The Carnavalet’s superb collection of shop and building signs, spanning four centuries, still greets visitors in the same airy gallery, but one of three new curved staircases, all in black and warm wood tones, now leads discreetly to the upper floors. 

The improved exhibition spaces should give a new lease of life to the Carnavalet, which is often overlooked by tourists in favour of Paris’s bigger, brand-name museums. It’s a shame because, unlike the Louvre or the Musée d’Orsay, the Carnavalet — once Italo Calvino’s favourite museum, according to his autobiography Hermit in Paris — is free, like all other city-run museums. Visitors are only charged for temporary exhibitions (the first will be devoted to the photographer Henri Cartier-Bresson, June 15-October 31). 

The Carnavalet is one of 14 museums run by the City of Paris, and the renovation was lavishly funded by the French capital, to the tune of €55m (94.5 per cent of the total cost). “It’s the history of Parisians,” says Carine Rolland, Paris’s deputy mayor for culture. “We really wanted to bring it into the present.”

The new permanent exhibition does just that: while previously the Carnavalet’s collections took visitors only to the 1910s, additional rooms now cover the 20th and 21st centuries. They remain fairly modest, especially when it comes to the past two decades (memorialised mainly through photographs of events including the November 2015 terrorist attacks), but Guillaume intends to keep acquiring recent artworks and memorabilia.

More impressive is the newly opened basement, devoted mainly to the prehistoric, ancient and medieval history of the city. A lost gargoyle from Notre-Dame de Paris has made it out of the Carnavalet’s 615,000-strong reserves; the collections also feature the first known stone inscription mentioning the “Parisii”, the Gallic tribe that gave its name to modern Paris, previously known under its Roman name, Lutetia.

Elsewhere, major attractions have been given a little more space to impress. A recreation of Marcel Proust’s bedroom, made possible by the donation of the author’s original furniture, is no longer stuck in a small alcove. Context has been added, including audio recordings of In Search of Lost Time. 

The Carnavalet’s many other period rooms have retained their vivid effect. Out of them, the sweeping ballroom decor designed by Josep Maria Sert i Badia in the 1920s for Paris’s Hôtel Wendel, lifted in 1989 to be displayed at the Carnavalet, is enough to make you want to waltz across the otherwise empty room. Painted red drapery lends the character-heavy murals, inspired by the Queen of Sheba, a sense of theatrical movement, even snaking through billowing clouds on the ceiling.

The history of Paris is so full of twists and turns that it remains a sensitive subject in France. That’s especially true of the 19th century, when successive revolutions led to imperial regimes, attempts at democracy and even the shortlived, utopian socialist government of the Paris Commune, exactly 150 years ago. When the Carnavalet opened, less than a decade later, it displayed what the scholar Felicity Bodenstein called “secular relics”, including Napoleon’s toothbrush, in an attempt to appeal to visitors’ emotions and build a narrative around France’s “great men”.

Now the Carnavalet is at pains to change that narrative and learn from recent scholarship, as the French revolution rooms indicate: in addition to altered displays, Guillaume is installing new audio recordings of speeches and individual stories, highlighting different facets of the events. “We wanted to provide additional elements and perspectives,” the director says.

Renewed attention has also been paid to religious diversity in the city, with rediscovered medieval Jewish tombstones, and to the history of Parisian women — starting with the 17th-century writer Madame de Sévigné, who once lived in the Carnavalet’s main hôtel particulier and called it her “Carnavalette”.

While the pandemic pushed back the reopening, initially scheduled for 2020, it didn’t have as much of an impact on the closed Carnavalet as on other French museums — although it did create some difficulties. “The maker of the new display cases is German, so with mandatory quarantine, we had a very long wait every time he needed to be here over the winter,” Guillaume says.

In late May, the new Carnavalet will compete with the many cultural institutions reopening after six months of Covid-related restrictions. Still, between the anniversary of the Commune and the recent, divisive bicentenary of Napoleon’s death, it has plenty to contribute to French cultural life — and, for foreign visitors, it may be just the right introduction to Paris’s many controversies.

European group looks set to benefit from demand for cheaper and more nimble aircraft

After a year reeling from the pandemic, one of the world’s most lucrative aviation markets is braced for further disruption. JetBlue, one of the most successful US low-cost carriers, is making its transatlantic debut this summer. 

But it is the plane — a single-aisle Airbus on routes that are dominated by large, twin-aisle planes — that may have ramifications just as profound for the aviation industry as the carrier’s low-cost business model.

The New York-based airline is launching its assault with the Airbus 321LR, a long-range version of a plane best-known as a workhorse for short-haul services such as those between London and Frankfurt.

The model is just one of Airbus’s A320 family of jets, whose success has given the Toulouse-based company a 60 per cent share in the single-aisle market and the upper hand over fierce rival Boeing.

After the worst year in decades for airlines — and with a return to pre-pandemic travel, particularly among business customers, far from clear — the market for cheaper, nimbler single-aisle planes is now the hottest in the aviation industry.

“The recovery will be led on the short-haul part of the business, on the narrow-body side,” said Aengus Kelly, chief executive of leasing company AerCap, one of the world’s biggest purchasers of aircraft.

The A321 can fly 4,000 nautical miles, several hundred further than a normal short haul Airbus. Boeing does not yet have a plane to match it.

The long-range versions of the A321 are “creating new routes . . . that were there before but in smaller quantities,” Christian Scherer, chief commercial officer at Airbus, told the Financial Times. “It is a very effective and efficient way to link two points with 180-200 passengers.” 

While its rival has stolen market share, Boeing has grappled with the fallout from the grounding of its 737 Max following two fatal crashes.

The backlog of Max deliveries built up during their grounding has begun to clear, but Chicago-based Boeing has also faced quality problems with its wide-body 787 Dreamliner. In the meantime, plans for a giant new wide-body airliner, the 777X, are also running late. 

Boeing’s initial response to the A321 is the larger Max 10 due to enter service in two years’ time but, given it has a shorter range than the latest A321 variants, the model is considered less capable.

Even before the Max accidents, Airbus was pulling in orders for its A320neo and A321 family of narrow-body aircraft at a faster rate than Boeing’s 737 Max. Industry experts have suggested it needs to launch a completely new aircraft to take on the threat posed by the A321. 

A previous plan to launch a mid-range twin-aisle, the so-called NMA, was shelved in the wake of the Max accidents. 

“The strategic issue that the NMA was meant to deal with is still there and has, if anything, gotten worse,” said Rob Stallard of Vertical Research Partners. “Airbus is rampant at the top end of the narrow-body market and Boeing doesn’t have anything to match it.”

If Boeing’s need to close the ground on Airbus in the single-aisle market is clear, how it does so is less so. 

For both manufacturers, short-term pressures are not the only consideration when deciding whether to launch a new plane.

With airlines under mounting pressure to reduce their contribution to global warming, one big question facing Boeing is whether to launch a conventionally powered plane, or wait until next-generation technology allows them to make something much greener.

“Typically, each new aircraft generation would be expected to deliver about a 20 per cent improvement in unit costs, mainly through fuel efficiency,” said Robert Boyle, former strategy chief of British Airways and founder of Gridpoint Consulting. 

“In the past, a lot of that has come from engine technology. I’ve not seen much evidence for where the next 20 per cent will come from to underpin the business case for the next generation of aircraft.”

Failure to commit to a new aircraft, however, could see Airbus entrench its dominance — leaving Boeing with nothing but price cuts as a competitive weapon.

“If Boeing doesn’t launch a new plane, they could easily lose 10 points of market share. And if they don’t launch a new plane, they could lose the ability to do so,” said Richard Aboulafia, vice-president at Teal Group, the aerospace consultancy. 

The dilemma comes after a brutal period for the finances of the aerospace industry.

Boeing ended 2020 with net debt of nearly $64bn compared with Airbus’s net cash of €4.3bn. The US group’s cash flow has begun to recover, however. It reported free cash outflow — operating cash minus capital expenditures — of $3.7bn for the first quarter, compared with an outflow of $4.7bn a year ago.

“Boeing is in a disadvantaged position financially to consider development and launch of a new product in the narrow-body segment. Environmental pressures are also a critical factor in any new design,” said Rob Morris, head of consultancy at Ascend by Cirium.

It is one of the reasons some industry executives are urging caution.

John Plueger, chief executive of Aer Lease, one of Boeing’s largest customers, said: “We’ve been clear with Boeing that they really need to get their house in order first before we have an interest in talking about new aircraft.” 

AerCap’s Kelly sounds a similar note of caution, noting that “the reality is that airlines are fed up with new technology being introduced”. 

“They have had more change of technology over the last 12 years than ever before . . . there is fatigue with it.” 

Boeing, he added, “need to get the Max up in the air, hold on to the customer base that they have and make sure they have a competitive price offering. Then, they can work with the engine manufacturers to see if there is a propulsion system that can make a difference.”

Boeing declined to comment for this article. However, industry sources said the company is talking to potential customers and engine makers about a new plane. 

Asked “what’s next” on its first-quarter earnings call last month, chief executive Dave Calhoun suggested the company was looking at ways of improving cost efficiencies through deploying different engineering and manufacturing techniques. 

“I expect the next product to get differentiated probably in a significant way on the basis of the way it’s engineered and built and less dependent on the propulsion package that goes with it,” he told analysts. 

Back in Toulouse, Airbus’s executives are watching for Boeing’s next move. The pressure on manufacturers to decarbonise is growing. Before the pandemic, aviation accounted for about 2.4 per cent of global emissions. Airbus has thrown its weight behind a plan to have a zero-emission, hydrogen-powered aircraft ready for service by 2035.

“Plan A today is hydrogen. Sustainable aviation fuel would be the intermediate step,” said Scherer, adding that “for the overall ecosystem and for the staying power of our industry, I think it is preferable that we all concentrate on decarbonising our industry”. 

Nevertheless, he insists the company is keeping its “options open” and will not rule out launching another conventionally powered aircraft. 

“We are today the number one aircraft manufacturer in the world. You have to expect us to want to maintain that.”

Deal expected to trigger fresh wave of consolidation in the sector

Lockdowns spurred many Americans to invest in home renovation projects or new hobbies. For David Zaslav, late-pandemic boredom spawned another idea: buying a $100bn company. 

In February, the Discovery chief executive had arranged to play golf with AT&T chief John Stankey at the Pebble Beach Pro-Am tournament in California. But a Covid-19 surge wrecked the plan and Zaslav, “feeling bummed”, sent Stankey an email instead: “Give me a buzz: I got an idea.”

The two executives, who said they had previously bonded over “golf and eating”, ended up talking for hours as Zaslav pitched Stankey on merging Discovery with WarnerMedia.

“I laid it out for him,” said Zaslav, who said he was on the phone to Stankey for so long his wife thought he had left the house. “It was like, boom. We’re in sync.” 

Stankey offered to come to New York, where the two met on April Fool’s day at Zaslav’s Greenwich Village brownstone to hash out the details. “We wanted to be discreet,” Zaslav said.

The February phone call was the beginning of a top secret operation by AT&T, America’s oldest phone company, to spin off the Hollywood empire it acquired for $85bn only two-and-a-half years ago. Bankers and executives see it as the trigger for a second wave of consolidation in the US and beyond, as traditional media fights for survival in an entertainment business whose future will be ruled by streaming. 

The past five years has included not one but two era-defining megadeals — Disney’s purchase of Rupert Murdoch’s Fox empire, and AT&T’s acquisition of Time Warner — and yet media companies have determined they still lack the scale to compete in the fast-changing digital entertainment landscape.

Netflix and Disney Plus, with 208m and 104m subscribers respectively, sit atop the league table of pure streaming services. With more than 100 services available, the rest of media is left battling for a spot as a must-have in consumers’ monthly budgets. Warner’s HBO Max service has added 10m retail subscribers since its US launch last year, while Discovery has 15m subscribers worldwide.

“I expected . . . there was likely to be more consolidation,” Stankey told reporters on Monday. “We . . .[wanted to] initiate that rather than have to follow it.”

After their New York meeting, the executives hired boutique investment banks LionTree and Allen & Co to advise AT&T and Discovery, respectively. They were later complemented by Goldman Sachs and JPMorgan, who would provide an essential $41.5bn bridge loan to complete the complex transaction.

The deal came together at a clip, despite some tough negotiations on how to divide up ownership of the new company, with the two sides eventually agreeing to give AT&T shareholders 71 per cent and Discovery 29 per cent. Even Jeff Zucker, a longtime friend of Zaslav and the chief executive of CNN, one of WarnerMedia’s most important properties, only found out about the deal on Sunday.

During the hush-hush negotiations, code named Project Columbus, AT&T was referred to as Armstrong, WarnerMedia as Magellan and Discovery as Drake.

The two sides are still discussing a real name for the combined company: ideas under consideration include “Warner Discovery”, “Warner Bros Discovery” and “Warner Discovery Media”.

Together, Warner and Discovery will become the second-largest media group by revenue after Disney, with $41bn in sales annually — a figure that Zaslav anticipates will rise to $52bn by 2023. The company will have $55bn in debt after the spinout. 

For AT&T, the transaction wipes $43bn from its debt pile, which stood at $169bn in net debt at the end of March and has been weighing on shareholders’ minds. The company’s shares have been flat since a year ago despite a broader market rally. “I’m not happy about that,” Stankey told investors in March. “And I wake up every day thinking about that.” 

The merger is a remarkable coup for Zaslav, a hyper-ambitious executive who has catapulted himself to the top of the food chain in entertainment. He has spent the past decade presiding over Discovery, a relative minnow with a market value a tenth of that of Disney. He now grabs the reins of a company that makes more revenue than Netflix.

The 60-year-old typifies a generation of larger-than-life media tycoons from a bygone era: the Murdochs, Redstones, Disneys and Turners — several of which Zaslav name-checked during a call with reporters on Monday. “We stand here on the shoulders of mighty titans, from Ted Turner to Steve Ross,” he waxed on, while calling Discovery shareholder John Malone a “teacher and best friend”. 

The deal also reflects Stankey’s lack of sentimentality in offloading the legacy of his predecessor, Randall Stephenson. Known for his plain spoken pragmatism, Stankey has also this year jettisoned DirecTV, the satellite broadcaster whose acquisition was another flagship transaction by his mentor. “He has basically undone the last 10 years of AT&T’s acquisitions,” said a person close to Stephenson. 

Cast aside in a brute fashion reminiscent of a plotline in Succession is Jason Kilar, the tech-minded outsider that Stankey brought in only 10 months ago to package WarnerMedia’s Hollywood assets into a proper streaming company.

Kilar, who developed a reputation as a dotcom disrupter through his invention of Hulu, found out about the deal last Wednesday and would probably depart the company, said people familiar with the matter. He was featured in a 2,800 word profile in The Wall Street Journal on Friday, only to be defenestrated three days later. When asked about Kilar’s future, Stankey said: “David [Zaslav] has a lot of decisions to make.”

For WarnerMedia, one of Hollywood’s most storied companies behind hits ranging from Casablanca and Citizen Kane to Friends and Game of Thrones, this will be the third gut-wrenching restructuring in three years.

One WarnerMedia executive said it adds “another year of turmoil” to what had been four years of “uncertainty and indecision”. A former senior colleague was optimistic, however. “Zaslav is very capable,” the second person said. “They will work with Warner, unlike AT&T, which was just: ‘Shut up and take orders.’” 

Zaslav has insisted he “wants to keep it all” but lay-offs seem inevitable given the overlap among the companies. Discovery expects to squeeze out $3bn of savings within two years. 

When asked by the Financial Times about integration plans, Zaslav offered few details, instead touting the “flexibility” he had. “We will be one company, one culture, one mission.”

If Zaslav can pull it off, Warner-Discovery could rival Netflix as one of the few genuinely global streaming services aiming for 200m-plus subscribers — and would likely be rewarded for it by Wall Street. 

While Discovery’s cash flow is largely generated in the US, it operates more than 80 networks across the world, with a strong local-language presence in the Nordic countries, Poland and Italy. Zaslav is determined to hold on to WarnerMedia’s best content, and never again enter the kind of licensing deal with Comcast’s Sky pay television service that prevents HBO Max from launching in the UK, Germany or Italy until at least 2025. 

But a successful expansion will require painful decisions within specific markets. Discovery has yet to decide whether to roll all its streaming services under one brand like Netflix, or use Disney’s platform approach, which deploys brands such as Star, ESPN or Hulu, depending on the market.

The deal is bound to prompt another reckoning across the entertainment business, say executives and bankers, as the relentless push for scale makes it even harder for those left behind. 

Comcast had informal conversations with AT&T’s Stankey about combining its NBCUniversal unit with WarnerMedia, but Discovery was viewed as easier to clear with regulators, said several people briefed about the matter. 

Brian Roberts, the chief executive of Comcast, could still try to make a counterbid to buy WarnerMedia’s assets, as he did when Disney agreed to buy Fox’s marquee businesses. However, gatecrashing the combination would be a tall order, according to several media bankers. 

One banker said that Warner-Discovery could itself become a takeover target in years to come, as big tech groups such as Apple or Amazon strike their own content-focused deals. On Monday it emerged that Amazon was in talks to acquire MGM, the film studio behind the James Bond franchise, for about $9bn.

“This is what [AT&T and Discovery] needed to do to be a sustainable company. You can’t be in this business operating only in the US,” said a senior executive at a big media group. “So there will be a number of media companies now thinking: get bigger or get out”.

Accountancy group had complex interests regarding collapsed finance group

Grant Thornton, the administrator to the collapsed Greensill Capital, was previously hired to investigate the supply chain finance group’s relationship with Swiss asset manager GAM, according to people familiar with the matter.

The revelation raises concerns about conflicts of interest for Grant Thornton over Greensill, which collapsed in March and has morphed into a corporate and political scandal.

The accountancy firm’s work for Zurich-based GAM was part of an internal probe which examined the asset manager’s relationship with Greensill and led to the dismissal of one of its star fund managers.

Adding a further layer of complexity, while conducting a forensic audit of Greensill deals on behalf of GAM in 2018, Grant Thornton was separately working for one of Greensill’s biggest and most problematic customers, GFG Alliance, for which it was paid nearly £6m from 2016 to 2020.

GAM was a major investor in supply chain finance deals arranged by Greensill, including providing hundreds of millions of dollars to metals magnate Sanjeev Gupta’s GFG.

Grant Thornton’s previously unreported role at GAM raises questions about the level of knowledge it had about GFG and Greensill. GFG’s relationship with Greensill is now subject to a Serious Fraud Office probe.

GFG-linked investments formed part of the internal investigation at GAM, which began after a whistleblower in 2017 raised concerns about the Greensill-arranged deals, many of which were highly illiquid.

Star trader Tim Haywood, who managed more than $7bn of assets for GAM, was suspended in July 2018, pushing the asset manager into crisis as some investors rushed to make redemptions.

GAM later liquidated its flagship fund range which invested in such securities, and the following year dismissed Haywood. The internal probe’s findings alleged serious flaws in the company’s due diligence in relation to the Greensill deals.

GAM’s management in late 2017 hired law firm Bryan Cave Leighton Paisner to review the whistleblower allegations, with Grant Thornton brought in to conduct forensic audit work. 

In the spring of 2018, the whistleblower took his concerns to the Financial Conduct Authority.

Grant Thornton was also engaged as a forensic auditor on a parallel probe, which examined how Greensill obtained shares in a GAM-managed supply chain finance fund.

This part of the internal probe was based on a separate and previously unreported suspicious activity report filed in August 2018. This SAR questioned the transfer of these shares from a Dubai-based subsidiary of US commodities trading firm Bunge to Greensill. Bunge did not respond to a request for comment.

Greensill’s 2017 accounts show that it acquired the shares “in consideration for assuming a matching payment obligation . . . of $1.2bn”.

Grant Thornton has not publicly disclosed its role in the GAM investigation.

Greensill subsequently hired Grant Thornton in late 2020 to provide it with restructuring advice as the lender became increasingly concerned about its precarious financial position.

Greensill collapsed in March this year, leaving funds at Credit Suisse, which like GAM had invested in the supply chain finance group’s loans, nursing a potential $3bn loss.

The Financial Times has previously reported that Grant Thornton, in its capacity as administrator of Greensill, was unable to verify some of the invoices underpinning Greensill’s lending to Gupta, which were purportedly issued by companies that said they had never traded with Gupta’s Liberty Commodities. 

Grant Thornton had previously worked for Greensill as an auditor of at least two entities. Lex Greensill told the UK’s parliamentary treasury select committee that Grant Thornton ceased working for Greensill when it acquired a Germany-based bank in 2014. Greensill Bank’s management is now subject to a criminal probe. 

Grant Thornton has also acted on behalf of a number of entities forming part of Gupta’s GFG, which is now seeking a bailout after the collapse of Greensill, its biggest lender.

Ahead of being appointed as administrator to Greensill, Grant Thornton told the High Court in London that it had undertaken about 80 “diligence related instructions” in the past few years for GFG. According to a court filing, it was paid £5.8m from 2016 to 2020 for this work.

The Sunday Times previously reported that Grant Thornton’s work for GFG included providing advice on Gupta’s $500m acquisition of an aluminium smelter in France in 2018. Grant Thornton also revalued assets that GFG bought from Rio Tinto for £330m in 2016 upwards to £565m. The higher valuation, according to the Sunday Times, alongside a Scottish government guarantee over 25 years, aided GFG to raise substantial amounts of debt, which Greensill then securitised and sold to GAM.

Grant Thornton said that before accepting the administration mandate, it had given “careful consideration to the code of ethics relating to such matters” and satisfied itself that there was “no threat to its independence as a result of any prior relationships”.

GAM and Greensill declined to comment.