Greensill Capital

Greensill Capital was a supply chain finance company founded by Australian financier Lex Greensill. The business model involved providing short-term financing to companies by purchasing their receivables at a discount — essentially paying suppliers early and collecting from buyers later. At its peak, Greensill facilitated over $143 billion in financing and was valued at $7 billion after a $1.5 billion investment from SoftBank's Vision Fund. The company collapsed spectacularly in March 2021 when its key insurer, Tokio Marine subsidiary BCC, refused to renew credit insurance policies covering $4.6 billion in Greensill-arranged financing. Without insurance, the bonds Greensill packaged and sold through Credit Suisse's supply chain finance funds became unmarketable. Credit Suisse froze $10 billion in funds, and Greensill filed for insolvency within days. Investigations revealed alarming concentration risk: a huge portion of Greensill's lending went to companies linked to steel magnate Sanjeev Gupta's GFG Alliance, much of it based on 'prospective receivables' — invoices for goods and services that hadn't been delivered yet, and in some cases, might never be. Greensill had also engaged former British Prime Minister David Cameron as a senior adviser, who lobbied the UK government for Greensill to access emergency COVID lending programs. The scandal led to a formal UK government inquiry, the collapse of Credit Suisse's supply chain finance business (contributing to CS's eventual takeover by UBS), and criminal investigations in Germany. Lex Greensill's companies in the UK and Australia entered administration, leaving thousands of workers at GFG Alliance steel plants facing uncertain futures.