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The taxpayer could be on the hook for the £2m paid out to Greensill employees after the finance company went into administration.
Kevin Hollinrake, a junior minister in the Department for Business and Trade (DBT), said the government’s Redundancy Payment Service (RPS) had paid out £2,004,511 to employees of Greensill Capital Management Company (GCMC) after it went into administration in March 2021.
The RPS pays people who are made redundant when the company they work for collapses. If this money cannot be recovered from the failed business, the loss comes from the National Insurance Fund, paid for by National Insurance contributions.
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A request for this money was sent by the government to GCMC’s administrators Grant Thornton UK LLP in April this year, Mr Hollinrake said – but no money has yet been sent so far, and Grant Thornton has said it cannot guarantee the debt will ever be paid in full.
It is normal for companies which go bust to be unable to pay their creditors back in full – sometimes only providing pennies on the pound.
The administration process – especially for complex companies like Greensill – can take many years to complete.
Grant Thornton currently says it expects to finish its work in 2025, having been appointed in March 2021.
The Greensill structure was complicated – with ultimate control resting in an Australian company.
Two companies – Greensill Capital (UK) Limited and GCMG – were the main ones in the UK.
According to the latest report from Grant Thornton in September, the Greensill empire had trade assets worth $17.7bn (£14bn) in March 2021, and administrators have so recovered $9.3bn (£7.35bn).
Administrators for Greensill UK have recovered $114m (£90.14m) of this.
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