Tata Steel has sued three of Sanjeev Gupta’s metal units for 7.9 million pounds ($11 million) over missed payments, piling more woes onto the embattled tycoon’s corporate empire.
The London lawsuit centres on the 2017 sale of Tata’s specialty steel business to Liberty House Group for 100 million pounds ($139 million). Liberty told the Indian firm’s UK arm that it had run into difficulties as early as May 2020 when demand for steel was hit due to the pandemic, lawyers for Tata said in documents filed at the UK high court.
Gupta’s business has been searching for funding after the collapse of Greensill Capital, its biggest lender. It looked to have secured a lifeline for his ailing steel business when terms were agreed on a 200-million-pound loan from White Oak Global Advisors on Thursday.
By March 2021, Liberty was still struggling with late payments and wrote that it was “going through a crisis arising out of the insolvency of its principal lender, Greensill Capital”, Tata’s lawyers said in the filings. Tata is also seeking a further payment of 10 million pounds from Liberty if it wasn’t paid by May 1. It’s not clear whether these amounts have been paid yet.
The suit was filed less than a month after Credit Suisse Group – through Citibank – filed a winding-up application against another of Gupta’s businesses, Liberty Commodities. Tata declined to comment beyond confirming that it had issued proceedings against the firms. The Gupta-led GFG Alliance declined to comment too.