E.t is a long way from the sugar cane fields in Bundaberg in the north of Queensland, Australia to the bank towers of London, from the resourceful farmer’s son to the billionaire financial juggler, from the combine harvester to the private plane. Alexander Greensill, known as Lex, took a good three decades to do this. The way back was faster.
It led from London via Swiss credit institutions, a Bremen bank and the Australian capital Canberra to the unadorned offices of insolvency administrators. It will end in courtrooms. Because the financial group that he forged and then – as if he was running a traditional bank – baptized in his own family name, collapses.
German investors are also drawn into the abyss. There are fewer private investors who parked around 1 billion euros in the Bremen branch of Greensill Bank. On Monday evening, the financial supervisory authority Bafin applied for insolvency for them at the Bremen District Court. Investors can calmly watch how the German banks’ deposit protection fund will take effect.
Half a billion euros should not be protected
Of deposits over 3.6 billion euros, however, 500 million euros are said to be unprotected. This is why there is nervousness in many town halls that have invested money in Greensill with short terms: from small ones like Weissach to medium-sized ones like Monheim to large ones like Wiesbaden. 26 affected municipalities, which together can no longer access deposits of 255 million euros at the bank, held a conference this week in order to legally position themselves for the insolvency proceedings and to look for a way out.
Whether and how they will find him is open. Because many investors around the world are looking for ways out of the Greensill Crisis. Those involved, such as former Australian Foreign Minister Julie Bishop, who oversaw Greensill’s Asia-Pacific business as Chairwoman, fear for their reputation. The Indo-British entrepreneur Sanjeev Gupta fears for his money.
He forges steel alliances around the world. Thousands of jobs depend on him in Australia, and he wanted to buy Thyssen-Krupp’s steel division. Because he had his branched company financed through Greensill, Gupta is now on dry land.
Some allow the Monheimers the damage
Like many a German chamberlain. For example that of Monheim. Some of his colleagues can hardly suppress the malice – Monheim of all people! The city of 40,000 between Cologne and Düsseldorf attracts companies (including from other municipalities) with its low trade tax rates. That allowed her to invest 38 million euros at Greensill Bank.
They supported four brokers: Zeindl Finanzmakler OHG, CC Gesellschaft für Geld- und Devisenanlagen mbH, Witt GmbH & Co. KG and ICFB GmbH. The municipality of Weissach in Baden-Württemberg has invested a fixed-term deposit of EUR 16 million at Greensill at 0.2 percent (20 months) and 1 percent (six years).
At the time of investment, Greensill was rated A- (investment grade). The default risk of the fixed-term deposits was 0.071 percent during the conclusion in the first investment year. “At no point in time were the financial service providers uttered any information, warnings or sensitization to the investments at Greensill Bank,” says Weissach. Another 53.9 million euros are elsewhere: at Nord LB Luxembourg, IKB and Volkswagen Bank, for example.
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