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Steel magnate Sanjeev Gupta’s “irresponsible” management is threatening European production of the metal as concerns mount over the viability of several of his plants, a powerful bloc of trade unions has warned.
Two big union federations IndustriALL Europe and IndustriALL Global, representing millions of workers, have called on the European Commission to set up a task force to tackle a “crisis” at Gupta’s Liberty Steel operations.
IndustriALL Europe represents 180 unions in 38 countries, while IndustriALL Global represents 800 unions in 140 countries. Together the two federations represent 7mn workers across manufacturing in Europe.
Unions have held a “crisis meeting” to warn against the “risk of Europe’s steel production capacities becoming severely damaged and the green steel challenge unmet due to Mr Gupta’s irresponsible management”, they said in a statement.
They want Gupta to provide “full transparency” over the finances and refinancing of his European steel operations, which have been hit by production cuts and legal disputes amid a wider economic downturn in the region.
Many facilities at Gupta’s European steel plants have been idle for weeks because of financial problems with no clear prospect of a restart to production as supplier bills go unpaid and raw materials run dry, the unions said. The lack of “liquid capital” had led to a “historically severe crisis”, they added.
The call for intervention is the latest sign of problems at the businessman’s sprawling GFG Alliance, a loose collection of groups around the world that includes Liberty, the global steel and mining company.
GFG has been hit hard since the collapse of its main lender Greensill Capital in 2021. It was then dealt a blow by high energy costs following Russia’s invasion of Ukraine in 2022.
The group has come under scrutiny for its lack of financial transparency and is under investigation from the UK’s Serious Fraud Office. GFG denies any wrongdoing.
Since the collapse of Greensill, Gupta has been battling to hold his business together.
Credit Suisse’s asset management arm told investors last month that a debt restructuring deal with GFG could not be implemented as expected after the steel group failed to make a payment on time, although it said talks were continuing.
GFG said it was working towards a “consensual debt restructuring” with the main creditors of Greensill.
“There is a massive lack of transparency in this company. We have been promised for years consolidated accounts for GFG’s European sites to no avail,” said Judith Kirton-Darling, acting joint general secretary of industriAll Europe.
“At the same time, a lot of state aid has gone into them and yet many plants are idle or falling apart. We want to know where this public money has gone,” she added.
Gupta pledged to file consolidated accounts for his steel business in 2019, but is yet to do so.
Many of Gupta’s blast furnaces have been idled, while a lack of readily available capital has led to the suspension of basic maintenance, according to the unions.
The situation at Gupta’s Ostrava steelworks in Czechia is considered particularly critical with production stopped amid a dispute over unpaid energy bills.
GFG said the unions’ statement was “misguided and misleading”.
“Like all Europe’s steelmakers, Liberty’s operations have been hit by high energy prices, high inflation and high imports which have led to more than 20 per cent of the continent’s primary steel being on hold.”
The company said it had a “robust restructuring plan” for Liberty Ostrava, which showed an “achievable path back to profitability and the repayment of creditors”.
Despite these market challenges, Liberty has “continued to ensure its employees are paid on time and plants safely maintained even when they are not fully operational”, the company added.