Former Prime Minister David Cameron and Tory leader Kemi Badenoch have been pulled deeper into a bitter legal row over the Government’s attempts to ban failed financier Lex Greensill from being a company director.
Greensill sensationally claimed in court last week that key accusations of misconduct over Covid loans – not spelt out in court but which he believes are central to the case against him – were abandoned ‘for political reasons’.
Cameron was a close adviser to Greensill, whose firm was swept up in a lobbying scandal after the Australian tycoon secured £10 billion of Covid loans from the state-backed British Business Bank.
Lex Greensill, 49, argues allegations against him over these Covid loans were dropped just as Cameron was making a political comeback as Foreign Secretary.
At the time, Badenoch was Business and Trade Secretary with her department overseeing the Insolvency Service. Greensill is fighting proceedings brought by both to disqualify him as a company director.
He was at a two-day High Court hearing last week, in which he sought to strike out the Government’s case. His barrister Ian Winter KC, said he received advance notice of disqualification proceedings on November 15, 2023. At that time, Prime Minister Rishi Sunak had arranged for Cameron to join the House of Lords to become Foreign Secretary, the court heard.
No smoke without fire: David Cameron with disgraced financier Lex Greensill on a trip to Saudi Arabia in 2020
The previous day, the Insolvency Service had met staff at the British Business Bank and Serious Fraud Office to inform them they ‘weren’t proceeding with the Covid loan allegation’. Winter said successive Secretaries of State for Business and Trade, from Badenoch onwards, had declined to ‘disclose notes of those meetings’.
The Insolvency Service went ahead with attempts to ban Greensill based on allegations he made ‘misrepresentations’ to investors, insurers and boards of his own firms unrelated to the Covid loans and insolvency of his company. Full details of these accusations have yet to be revealed.
Winter said the element of the case involving Covid loans ‘was not included for political reasons’.
But Department for Business barrister David Mohyuddin KC told judge Mr Justice William Trower: ‘You can reach no such conclusion. It would be wholly unsafe.’
Cameron was accused of intense lobbying to secure approval from the Government-backed British Business Bank to make £10 billion of Covid loans to Greensill’s business in 2020. The ex-PM sent dozens of texts and emails to civil servants, as well as calling former Tory bigwig Nadhim Zahawi, then a junior business minister.
Greensill faces a five-day trial in the summer, to be heard in the Business and Property Court.
His barrister said the collapse of the business in 2021 was ‘closely related to Greensill Capital UK’s participation in the Covid Large Business Interruption Loans scheme, with which Lord Cameron had been closely involved’.
The Insolvency Service seeks to disqualify Greensill from company directorships for 12 years. Winter branded the proceedings ‘inconsistent and unsustainable’ adding: ‘He isn’t responsible for the causes of insolvency and therefore shouldn’t be disqualified.’
Mohyuddin conceded the alleged misconduct which now forms the basis of the case against Greensill was not linked to the insolvency, but said: ‘Ask yourself ‘Is there misconduct?’ then ask yourself, does it render Mr Greensill unfit?’
Mr Justice Trower reserved judgment until a later date.
A spokesman for Kemi Badenoch said: ‘We will not comment on an ongoing legal case. As Business and Trade Secretary, Kemi Badenoch always prioritised getting best value for the British taxpayer.’
A spokesman for the Insolvency Service, Greensill and Cameron said they would not comment.
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