At the center of the unraveling of specialty finance firm Greensill Capital is Sanjeev Gupta, an Anglo-Indian steel entrepreneur building a new empire in an old industry.

Greensill plans to file for insolvency in the U.K. this week and is in talks to sell parts of its business, excluding assets linked to Mr. Gupta, according to people familiar with the matter. The move comes after Credit Suisse Group AG on Monday suspended over $10 billion of investment funds connected to Greensill, in part, over concerns about the firm’s exposure to Mr. Gupta, The Wall Street Journal has reported.

The episode has cast the spotlight on the deal-hungry industrialist who has been feted by British royalty and European leaders as he has amassed a series of unloved steel and manufacturing assets, partly fueled by funding from Greensill.

Mr. Gupta’s sprawling GFG Alliance group of companies owns more than 200 manufacturing assets in 12 countries, generates annual revenue of $20 billion and employs 35,000 people. Its interests range from steel plants and a bank, to more eccentric businesses, including a small Scottish bicycle manufacturer, a tidal-energy project and a company that makes parts for vintage cars.

THE GREENSILL SAGA

But the 49-year-old entrepreneur remains a mystery to the wider steel market, with some companies and bankers raising concerns about the transparency of Mr. Gupta’s businesses and its financing, according to people familiar with the matter.

“They are an interesting player in the market, but when it comes to financial information it is more difficult to analyze from the outside,” said Ingo Schachel, a steel analyst at Commerzbank.

Concern about Greensill’s exposure to Mr. Gupta isn’t new.

German banking regulator BaFin last year began examining ties between the entrepreneur’s businesses and Greensill’s German bank, and in recent weeks appointed a special representative to oversee its day-to-day operations, according to people familiar with the probe. A report from Scope Ratings in 2019 said about two-thirds of the bank’s loan book was linked to Mr. Gupta’s businesses.

In July 2018, Swiss asset manager GAM Holding AG froze a $12 billion fund after an internal whistleblower raised concerns about how the fund valued the Greensill assets. These included hundreds of millions of dollars of illiquid assets tied to Mr. Gupta’s businesses.

Mr. Gupta declined to comment through a spokesman.

A spokesman for GFG declined to comment on Greensill but said that GFG has adequate current funds, with plans to bring in fresh capital.

“We are benefiting from a recovery in steel and aluminum markets, which means that most of our businesses are running at near full capacity,” he said.

Steel prices in Europe are trading at 13-year highs, almost doubling since last June, as demand rebounds after being hit by the pandemic, according to S&P Platts. Prices of iron ore and aluminum, which GFG also sells, are also healthy.

Ties between Mr. Gupta and Greensill—he has had a close, long-term business relationship with its founder and was briefly a shareholder in the finance firm—have also hindered the entrepreneur.

A concern that Mr. Gupta was too reliant on financing from Greensill was a factor behind industrial group Thyssenkrupp AG’s decision to end talks to sell its steel business to him in January, according to a person familiar with the deal. GFG said at the time that the deal collapsed on price.

Some have balked at the lack of transparency in GFG’s accounts. For instance, neither GFG nor its Liberty Steel arm disclosed consolidated accounts to ArcelorMittal SA during negotiations over the sale of several European steel plants in 2019, according to a person familiar with the matter.

A spokesman for ArcelorMittal said that Liberty Steel had made all its payments for the assets on time but declined to comment further.

A steelworker operates at a blast furnace operated by Liberty Steel.

Photo: martin divisek/Shutterstock

The GFG spokesman said that Liberty Steel planned to release consolidated accounts this year to improve transparency.

The company is separately preparing combined accounts for all GFG businesses and establishing a board with independent directors to appeal to investors in public markets and allow it to diversify its sources of funding.

Mr. Gupta is a director in more than 80 companies, according to Companies House, a U.K. business register, underscoring the complexity of his dealings.

Mr. Gupta was born in Punjab, northern India, to a family of industrialists. In 1992, while studying economics at Cambridge University, he started a company trading goods in Africa and Asia, which by 2000 had grown into a metals trader.

He rose to prominence in 2013 when Liberty bought a steel plant in south Wales, where a century-old industry had been laid low by cheaper competition from the developing world. That established a template that the company would use to buy unloved assets cheaply, often with government backing, and by 2018 the company had moved into the U.S. with two steel acquisitions.

The steel buying spree has continued with GFG last month agreeing to purchase a bankrupt steel plant in India for $60 million.

Mr. Gupta’s desire to buy troubled business saw him applauded in Britain and elsewhere, where industries like steel have declined in recent decades amid cheaper products from emerging economies like China, Vietnam and Turkey.

Prince Charles, the next in line to the British throne, told journalists in 2018 that Mr. Gupta had applied “real imagination, innovative thinking and sustainable rejuvenation to our nation’s heavy industries” at an event aimed at nurturing manufacturing skills.

Photos displayed at one Liberty Steel building in central London show him mixing with royalty and politicians. The company’s headquarters neighbors Buckingham Palace, the British royal family’s own base. But people who know Mr. Gupta say he’s too busy with work to socialize with high society, always with a phone to his ear.

Write to Alistair MacDonald at [email protected]

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This post first appeared on wsj.com

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