Advertisement

Sanjeev Gupta: the Indian visionary eyeing up British Steel

The government is seeking a buyer for the UK’s second-largest steelmaker. Sanjeev Gupta, an Indian-born tycoon with form as a saviour of troubled firms, is circling – but can he find the cash? 

Sanjeev Gupta © Getty Images

Sanjeev Gupta © Getty Images

The business secretary, Greg Clark, has been scouring India and China to drum up potential bidders for British Steel the UK's second-largest steelmaker, which collapsed into insolvency in May. One firm reportedly "monitoring the situation" is Liberty House, the industrial conglomerate led by Sanjeev Gupta one of a string of Indian-born tycoons who have been sizing up the ailing industry for the past decade.

Advertisement - Article continues below

Dubbed the "Man of Steel" by fans, Gupta, 47, has form as a rescuer. In 2013, he salvaged a troubled steel mill in South Wales and three years later became "one of Britain's biggest private landlords" when he bought Scotland's Lochaber aluminium smelter, together with two hydroelectric dams and more than 100,000 acres on the slopes of Ben Nevis, as The Sunday Times reported.

Scottish politicians couldn't have been more accommodating. In fact, politicians globally have been showering Gupta's operations with subsidies seduced by his "vision" of a new type of manufacturing called "green steel" (marrying metal production with renewable power). The purchase of seven more European plants from ArcelorMittal last week has made his umbrella Gupta Family Group (GFG) one of the world's biggest steelmakers, with an empire spanning 30 countries. The troubling question is whether an edifice built so speedily on the "risky alchemy" of "state handouts and clever financing" could just as easily evaporate.

Advertisement - Article continues below

The "world's most ambitious industrialist" has always been in a hurry, says Forbes. Born into a prominent Punjabi commercial family his grandfather owned steel mills; his father built a successful bicycle business Gupta arrived in Britain, aged 12, to board at St Edmund's College, Canterbury. He got to Cambridge to study economics at Trinity College, but had little time for academia, notes the Financial Times. He spent all his time trading. Liberty House began life in 1992, headquartered in Trinity, and developed a line selling ICI chemical products to Nigeria. By the time the college authorities wised up to his activities, Gupta claims "to have been turning over £1m a day with the help of various relatives". Fearing a breach of its charitable status, Trinity slung him out. "Tellingly, it wasn't the loss of accommodation that Gupta minded," but the fiscal advantage. "I wanted to use the college address because it meant the telex machine was exempt from VAT."

Roulette with public money

Steel is a brutal business, but "Gupta scents opportunity where everyone since the bewhiskered Victorian steel masters has failed", said the FT in 2016. Warming to the part, he and his wife Nicola have bought a large country-house estate near Chepstow a stone's throw from his Newport plant. Finance could be a little tight this summer: GAM "has demanded repayment of the bonds" and Gupta needs to raise about £600m fast. The ongoing question is whether he can "keep up his alchemy" now that GAM's door is "firmly shut".

Advertisement
Advertisement

Recommended

Visit/economy/people/601414/masayoshi-son-the-god-of-tech-tests-the-faithful
People

Masayoshi Son: the God of tech tests the faithful

Masayoshi Son, the founder of Japanese tech giant Softbank, has had a bad crisis. He has bounced back before, and will do again, he insists. It wouldn…
1 Jun 2020
Visit/economy/people/601377/top-four-financial-villains-of-the-last-20-years
People

Top four financial villains of the last 20 years

Despite MoneyWeek’s 1,000 issues, we struggled to find a page of material on people we considered particularly worthy of honour. We were spoilt for ch…
26 May 2020
Visit/economy/people/601333/great-frauds-in-history-lee-b-farkass-dodgy-mortgages
People

Great frauds in history... Lee B. Farkas’s dodgy mortgages

Lee Bentley Farkas transformed TBW into one of the largest mortgage brokers in the US – his fraud is reckoned to have cost around €3bn.
20 May 2020
Visit/economy/people/601332/the-making-of-warren-buffett
People

The making of Warren Buffett

The man who “triumphed in the long game by practising a simpler, purer version of capitalism” is widely hailed as the world’s greatest living investor…
17 May 2020

Most Popular

Visit/economy/uk-economy/601427/covid-bounce-back-loans-and-inflation
UK Economy

What bounce back loans can tell us about how we’ll pay for all this

The government will guarantee emergency "bounce back loans" for small businesses hit by Covid-19. Inevitably, many businesses will default. And there'…
1 Jun 2020
Visit/investments/commodities/601433/commodities-possibly-the-biggest-opportunity-in-todays-markets
Commodities

This looks like the biggest opportunity in today’s markets

With low interest rates and constant money-printing, most assets have become expensive. But one major asset class hasn’t. John Stepek explains why com…
2 Jun 2020
Visit/investments/commodities/gold/601444/these-seven-charts-show-exactly-why-you-must-own-gold-today
Gold

These seven charts show exactly why you must own gold today

Covid-19 is accelerating many trends that were already in existence. The rising gold price is one such trend. These seven charts, says Dominic Frisby,…
3 Jun 2020