Thousands of Australian jobs are at stake as billionaire steelworks owner Sanjeev Gupta is taken to court by Citibank
- Citibank launched legal action on behalf of Credit Suisse against Sanjeev Gupta
- Credit Suisse trying to recoup money by breaking up Gupta’s Australian assets
- If successful could trigger appointment of liquidators to the Whyalla steelworks
Thousands of jobs hang in the balance as the billionaire owner of South Australia’s Whyalla Steelworks is taken to court.
Citibank has launched legal action on behalf of Credit Suisse in an attempt to wind up two of Sanjeev Gupta’s operations – OneSteel Manufacturing and Tahmoor Coal.
If successful, the move could trigger the appointment of liquidators to the Whyalla steelworks and its associated mines, which employ more than 1,800 South Australians, and to the Tahmoor coal mine in NSW.
Citibank has launched legal action on behalf of Credit Suisse in an attempt to wind up two of Sanjeev Gupta’s (pictured) operations – OneSteel Manufacturing and Tahmoor Coal
It is the latest setback for Mr Gupta’s global business after the collapse of one of its major lenders, Greensill, last month.
Credit Suisse is trying to recoup some of the money it is owed by breaking up Mr Gupta’s Australian assets.
But his UK-based company, GFG Alliance, has vowed to vigorously defend the court action, saying it does not conduct any financing with Credit Suisse and has not sold the lender any receivables.
‘The Australian businesses are performing well and generating positive cash flow, supported by the operational improvements we’ve made and strong steel and iron ore markets,’ GFG Alliance said in a statement.
South Australian Treasurer Rob Lucas said Whyalla Steelworks employees should not be too concerned.
‘People shouldn’t jump to any alarmist conclusions at this stage,’ he said.
If successful, the move could trigger the appointment of liquidators to the Whyalla steelworks and its associated mines, which employ more than 1,800 South Australians, and to the Tahmoor coal mine in NSW
‘(GFG Alliance) are confident they are going to be able to manage a renegotiation of their financing arrangements. That is what they have said publicly and that is what they have been telling us privately.’
Federal Treasurer Josh Frydenberg is also monitoring the legal action, mindful of the potential fallout for Whyalla steelworkers.
‘Obviously, the government is talking with the South Australian government about ensuring that we can continue to keep jobs in Whyalla,’ he told the ABC.
‘But that is a matter now before the courts, so it would probably be inappropriate for me to be talking about those specific matters.’
The case is set for a directions hearing on May 6.