Greybull Capital: taking us for a ride.

UK tax payers pick up the tab for Greybull ‘failed’ purchases.

Comet, Monarch and more recently, British Steel are just some of the businesses bought by Greybull Capital LLP, who describe themselves as a private investment company, specialising in medium to long term investment. My knowledge of business and finance is sparse but because of the enormous impact Greybull have had on workers in the UK, I tried to discover more.

High profile collapses, with job losses that cannot be accurately calculated because of suppliers and other variables are not unusual, but Greybull appear to have a history of bad judgement in purchasing a long list of failures. Despite the phrase ‘asset strippers’ speaking for itself, I have no idea how it is turned into profit.

The reason I’ve decided to write about them is to try to make sense of (what appears to be) a procession of reckless investment disasters and more importantly what the cost has been to the UK in jobs and government financial losses.

Job losses.

Finding a precise number of workers made unemployed by Greybull is almost impossible but individually, every single one can be a personal disaster for those involved. Comet employed around 7,000 staff and Greybull immediately brought in troubleshooters to slash running costs for Monarch, resulting in 700 redundancies by cutting the amount of aircraft they had . When insolvency finally came, another 1,700 jobs disappeared and even more recently another 400 were lost in an engineering part of (what was left) of Monarch. British Steel has 4,400 UK employees but then an estimated 20,000 in the supply chain. Other smaller companies have endured partial redundancies/closure and overall, Greybull Capital seem to be an unmitigated disaster. Ownership by Greybull appears to be around three years for each of the above and ended in exactly the same way. Maybe it takes this amount of time to plan their strategy?Upon acquiring companies Greybull sends out all the right messages to reassure staff of their good intentions but this all too familiar pattern suggests something more sinister.

UK Government liabilities or losses resulting from Greybull Capital failures.

As we have seen in the past, pension contributions regularly fall short when a company goes bust but I haven’t tried to estimate how much that would be if Greybull were also guilty of neglecting their company pension funds.

Comet.

Deloitte estimated that government would lose £26.4 million in owed tax and £23.5 million in redundancy payments. However, the UK government were later order to pay a further £26 million because Comet had not followed redundancy rules.

Monarch.

When Monarch collapsed, 110,000 passengers were left stranded. The UK government paid £60 million to repatriate them. Instead of a £250 million loss, Greybull managed, according to reports, to achieve a £15 million profit.

British Steel.

Before British Steel went under, they sought a £75 million rescue package to keep the company trading. It seems this request was refused. Two weeks earlier though, the UK government had paid a £120 million EU carbon bill after the company’s own free-issue carbon credits had been previously sold.




Good fortune or calculated manipulation of the insolvency system?

So, do Greybull have the Midas touch or are they taking advantage of lax laws surrounding company behaviour? It seems that Greybull is still trading despite this catalogue of bankruptcies, so the conclusion must be that the company have no regard for the human cost of thousands of jobs being lost as long as they make a profit. Offshore bank accounts, dubious loans, deliberate tax avoidance are just some of the tricks this unscrupulous company may be using to siphon tax revenues from ordinary people like you and me via these practices.

According to my calculations, they have cost the UK tax payers at least £225 million and that doesn’t include the huge cost of losing so many jobs.

Greybull (and there are probably many ‘investment companies’ just like them) are systematically raking mind boggling sums of money from the treasury when, Conservative austerity policies are stripping our sick and vulnerable of vital services.

One of the first things a Corbyn government would do is tackle tax evasion by the wealthiest. Billions in revenue is being lost, not just by this method but countless other ways too, organised by very imaginative accountants.

If it were just corporations taking the hit over these collapses, so be it but when ordinary, decent, hard working people are effectively handing over money to these corporate parasites, whatever needs altering must be done. All that is needed is the political will to bring about that change.

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