David Cameron lobbied Tory associates at Lloyds Bank to rescue the Greensill deal

David Cameron has lobbied Lloyds Banking Group to reverse its decision to sever ties with the ailing Greensill Capital, calling on a board member he had greatly admired as prime minister.

Cameron lobbied for Lloyds in January, according to people familiar with the matter, when he contacted Lord James Lupton, the banker who was previously treasurer of the Conservatives, in an effort successfully persuaded the bank to continue doing business with Greensill.

Lupton, Tory treasurer from 2013 to 2016, was raised more than 3 million pounds for the Conservatives and was appointed to the House of Lords in 2015, spark accusations of cronyism against then-prime minister Cameron from rival politicians.

Cameron Earn millions of pounds as a boardroom advisor for Greensill, a supply chain finance company with unraveled earlier this year drag the former prime minister in Westminster’s biggest lobbying scandal for a generation.

Months before Greensill’s collapse in March, Lloyds had indicated it would cease doing business with the consortium, jeopardizing supply chain financial planning for NHS pharmacies run by Greensill that rely heavily on Greensill. Bank of the United Kingdom for funding.

People familiar with the matter said after Cameron’s plea – the threat the Lloyds withdrawal posed to the NHS scheme – the bank had reconsidered its decision and agreed to continue funding. to the pharmacy for a while.

Lupton announced his relationship with Cameron when he relayed the former prime minister’s request. However, some inside the bank found the former prime minister’s intervention through Lupton surprising and unwelcome, which came after the lender decided to end the business relationship. They say it was decisive in causing the overturn.

Lloyds said: “The decision to resume operations in January 2021 was made on a normal commercial basis and in recognition of the importance of maintaining this facility to the NHS during this period. peak of the pandemic.”

“The scheme ended after Greensill administration, with the bank fully reimbursed,” Lloyds added. “There is no loss to the NHS, the pharmacies that supply them or the Lloyds Banking Group.”

Greensill declined to comment. Cameron did not respond to a request for comment. Lupton did not respond to direct requests for comment and declined to comment through Lloyds.

Cameron was made aware of Greensill’s financial predicament when he approached Lupton, later telling MPs investigating the group’s collapse that he was for the first time “concerned that the company might face severe financial difficulties” in December 2020.

The company’s founder, Lex Greensill, helped establish the “Pharmacy Early Billing Scheme” – which pays chemists to dispense prescriptions before the NHS pays the bills – in time as a government adviser to Cameron. The plan was later managed by his eponymous financial firm.

The former prime minister has touted the scheme’s benefits while defending his work for Greensill, claiming in April that it had “successfully reduced costs for the NHS and enabled thousands of pharmacies to access early payments and low-cost credit.”

But while Greensill and Cameron both claim the scheme has saved the government £100m a year, the UK’s public spending watchdog said last month it had no proof the program provides any benefit to the taxpayer.

Cameron has also previously cited the NHS plan as defending Greensill’s controversial “future receivables” product, in which the company funds hypothetical bills that don’t yet exist.

“An algorithm has been used to help predict individual chemists’ prescribing behavior, so they can get money before actually prescribing,” he told MPs in May. “This is extremely common with pharmacies.”

However, the National Audit Office report found that this practice makes the pharmaceutical program more risky for lenders and that “no other financial provider is willing to accept the risks.” that Greensill Capital assumed”. This meant the government had to step in and finance the pharmacies when Greensill collapsed.

Greensill acts as a middleman when arranging funding for the program, with banks like Lloyds providing the financing.

Lloyds decided to back out of the deal in January after Morgan Stanley stopped distributing Greensill’s billed investment products. People familiar with the discussions said US investment banking had previously provided comfort to UK lenders.

Greensill tried to reassure Lloyds that Morgan Stanley would be replaced by Credit Suisse but before Cameron’s intervention the British bank refused to resume any funding until the Swiss bank started doing it. this role, according to people knowledgeable about the discussions.

Credit Suisse already has deep relationship with Greensill, has since exposed some of its wealthiest clients to billions of dollars suffered losses, after the Swiss bank moved $10 billion of their money into dubious investment products that financed some of Greensill’s funds customers with the highest risk.

Source link


News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button