Liberty Steel boss Sanjeev Gupta has been criticised in a report by MPs looking into the crisis that engulfed the company, as well as the future of the wider steel sector.
It claimed that the use by Mr Gupta – once known as the “saviour of steel” – of “high risk financial funding practices” was undermining the long-term viability of the steel industry in the UK.
The report by the Commons business, energy and industrial strategy select committee also called into question the “unusual and… unacceptable” way in which he structured his business empire.
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March: British steel feeling the pressure
It found that, in companies belonging to Mr Gupta’s GFG Alliance business empire, there was “no formal oversight or accountability” of the decisions taken by the businessman.
The MPs recommended that the government should reflect on the risks posed to UK industries “by such unusual corporate structures” and consider reforming company laws.
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They also said they would “welcome the Insolvency Service considering whether… Sanjeev Gupta may have acted in breach of his fiduciary duties as a company director”.
Labour MP Darren Jones, chairman of the select committee, said that “systemic issues” at the heart of Mr Gupta’s business empire “highlighted the vulnerabilities of Liberty Steel and its place in the wider steel sector in the UK”.
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“We met with hard-working and dedicated workers at Liberty Steel and want to ensure that the UK steel sector is able to continue to support their jobs,” he said.
“However, the evidence we heard during our inquiry has highlighted serious problems with high-risk financial practices, weaknesses in audit, and about inadequate accountability and corporate governance arrangements within GFG Alliance.
“Sanjeev Gupta must urgently fix these problems if he is to be seen as a fit and proper owner of steel companies in the UK.”
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Gupta tells workers: ‘I will not give up on you – you are my family’
The report also looked more widely at the UK steel sector, which it said “cannot continue to lurch from crisis to crisis”.
It called for action from the government to help the industry to address challenges such as high energy prices and barriers to supplying steel for major public projects.
Liberty bought and reopened a number of steel sites between 2015 and 2017 when the wider industry was in crisis.
But the company, which employs 3,000 people in the UK, fell into financial difficulties when its main source of funding, Greensill Capital, collapsed earlier this year.
In May, parent company GFG announced plans to sell seven UK plants employing 1,500 people as part of a subsequent restructuring plan.
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‘I bear complete responsibility for the collapse of Greensill Capital’
But last month, a £50m cash injection was announced, enabling Liberty to restart production at its plant in Rotherham, which had been closed since the spring.
The Serious Fraud Office has launched an investigation into suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of GFG Alliance businesses, including its financing arrangements with Greensill.
A GFG Alliance spokesperson said: “GFG Alliance takes note of the findings of the select committee. We will review and reflect upon its conclusions.
“We are disappointed that the report fails to recognise the significant role Sanjeev Gupta and Liberty Steel has played in saving and safeguarding thousands of UK jobs which otherwise would have been lost.”
GFG said it had implemented a range of measures to deal with matters raised in the report.
Food inflation has hit its highest level in almost a year and could continue to go up, according to an industry body.
The British Retail Consortium (BRC) reported a 2.6% annual lift in food costs during April – the highest level since May last year and up from a 2.4% rate the previous month.
The body said there was a clear risk of further increases ahead due to rising costs, with the sector facing £7bn of tax increases this year due to the budget last October.
It warned that shoppers risked paying a higher price – but separate industry figures suggested any immediate blows were being cushioned by the effects of a continuing supermarket price war.
Kantar Worldpanel, which tracks trends and prices, said spending on promotions reached its highest level this year at almost 30% of total sales over the four weeks to 20 April.
It said that price cuts, mainly through loyalty cards, helped people to make the most of the Easter holiday with almost 20% of items sold at respective market leaders Tesco and Sainsbury’s on a price match.
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Its measure of wider grocery inflation rose to 3.8%, however.
Wider BRC data showed overall shop price inflation at -0.1% over the 12 months to April, with discounting largely responsible for weaker non-food goods.
But its chief executive, Helen Dickinson, said retailers were “unable to absorb” the surge in costs they were facing.
“The days of shop price deflation look numbered,” she said, as food inflation rose to its highest in 11 months, and non-food deflation eased significantly.
“Everyday essentials including bread, meat, and fish, all increased prices on the month. This comes in the same month retailers face a mountain of new employment costs in the form of higher employer National Insurance Contributions and increased NLW [national living wage],” she added.
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Five hacks to beat rising bills
While retail sales growth has proved somewhat resilient this year, it is believed big rises to household bills in April – from things like inflation-busting water, energy and council tax bills – will bite and continue to keep a lid on major purchases.
Also pressing on both consumer and business sentiment is Donald Trump’s trade war – threatening further costs and hits to economic growth ahead.
A further BRC survey, also published on Tuesday, showed more than half of human resources directors expect to reduce hiring due to the government’s planned Employment Rights Bill.
The bill, which proposes protections for millions of workers including guaranteed minimum hours, greater hurdles for sacking new staff and increased sick pay, is currently being debated in parliament.
The BRC said one of the biggest concerns was that guaranteed minimum hours rules would hit part-time roles.
On the outskirts of Ho Chi Minh City, factory workers at Dony Garment have been working overtime for weeks.
Ever since Donald Trump announced a whopping 46% trade tariff on Vietnam, they’ve been preparing for the worst.
They’re rushing through orders to clients in three separate states in America.
Sewing machines buzz with the sound of frantic efforts to do whatever they can before Mr Trump’s big decision day. He may have put his “Liberation Day” tariffs on pause for 90 days, but no one in this factory is taking anything for granted.
Image: Staff have been working overtime
Workers like Do Thi Anh are feeling the pressure.
“I have two children to raise. If the tariffs are too high, the US will buy fewer things. I’ll earn less money and I won’t be able to support my children either. Luckily here our boss has a good vision,” she tells me.
Image: Do Thi Anh
That vision was crafted back in 2021. When COVID struck, they started to look at diversifying their market.
Previously they used to export 40% of their garments to America. Now it’s closer to 20%.
The cheery-looking owner of the firm, Pham Quang Anh, tells me with a resilient smile: “We see it as dangerous to depend on one or two markets. So, we had to lose profit and spend on marketing for other markets.”
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That foresight could pay off in the months to come. But others are in a far more vulnerable state.
Some of Mr Pham’s colleagues in the industry export all their garments to America. If the 46% tariff is enforced, it could destroy their businesses.
Down by the Saigon River, young couples watch on as sunset falls between the glimmering skyscrapers that stand as a testament to Vietnam’s miracle growth.
Image: Cuong works in finance
Cuong, an affluent-looking man who works in finance, questions the logic and likelihood that America will start making what Vietnam has spent years developing the labour, skills and supply chains to reliably deliver.
“The United States’ GDP is so high. It’s the largest in the world right now. What’s the point in trying to get jobs from developing countries like Vietnam and other Asian nations? It’s unnecessary,” he tells me.
But the Trump administration claims China is using Vietnam to illegally circumvent tariffs, putting “Made in Vietnam” labels on Chinese products.
There’s no easy way to assess that claim. But market watchers believe Vietnam does need to signal its willingness to crack down on so-called “trans-shipments” if it wants to cut a deal with Washington.
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The US may also demand a major cutback in Chinese manufacturing in Vietnam.
That will be a much harder deal to strike. Vietnam can’t afford to alienate its big brother.
Image: Luke Treloar, head of strategy at KPMG in Vietnam
Luke Treloar, head of strategy at KPMG in Vietnam, is however cautiously optimistic.
“If Vietnam goes into these trade talks saying we will be a reliable manufacturer of the core products you need and the core products America wants to sell, the outcome could be good,” he says.
But the key question is just how much influence China will have on Vietnamese negotiators.
Anything above 10-20% tariffs would be intensively challenging
This moment is a huge test of Vietnam’s resilience.
Anything like 46% tariffs would be ruinous. Analysts say 10-20% would be survivable. Anything above, intensely challenging.
But this looming threat is also an opportunity for Vietnam to negotiate and grow. Not, though, without some very testing concessions.
Trade talks between the UK and the United States are “moving in a very positive way”, according to the White House.
President Donald Trump’s press secretary Karoline Leavitt spoke about the likelihood of the long-discussed agreement during a press briefing.
In Westminster, there are hopes such a deal could soften the impact of the Trump tariffs announced last month.
Leavitt told reporters: “As for the trade talks, I understand they are moving in a very positive way with the UK.
“I don’t want to get ahead of the president or our trade team in how those negotiations are going, but I have heard they have been very positive and productive with the UK.”
She said Mr Trump always “speaks incredibly highly” of the UK.
“He has a good relationship with your prime minister, though they disagree on domestic policy issues,” she added.
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“I have witnessed the camaraderie between them first hand in the Oval Office, and there is a deep mutual respect between our two countries that certainly the president upholds.”
Image: White House Press Secretary Karoline Leavitt said she was positive about a deal. Pic: AP
He was careful to not get ahead of developments, however, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”
He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.
Mr McFadden’s tone was more cautious than Chancellor Rachel Reeves’ last week.
She had been in the US and, speaking to Sky News business and economics correspondent Gurpreet Narwan, the chancellor said she was “confident” a deal could be done.
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‘We’re confident’, says Reeves
But she sought to play down fears that UK standards could be watered down, both on food and online safety.
“On food standards, we’ve always been really clear that we’re not going to be watering down standards in the UK and similarly, we’ve just passed the Online Safety Act and the safety, particularly of our children, is non-negotiable for the British government,” Ms Reeves said.