Romanian Authorities Probe Liberty Steel and GFG Alliance Over Embezzlement and Tax Evasion Allegations
Romania's prosecutor's office has conducted raids on seven residences and the registered office of an unnamed company in Galați and near Bucharest in connection with an embezzlement and tax evasion investigation involving Liberty Steel and the GFG Alliance.
The probe alleges that management engaged in embezzlement through affiliated entities registered in other jurisdictions by creating contracts for goods and services without real operations and fabricating loan agreements.
Investigators are focusing on a €137 million sale of CO2 certificates to Gazprom, suspecting that proceeds were routed through a Singapore-registered intermediary to the parent company. Gazprom is subject to UK and US sanctions.
These CO2 certificates were subsequently replaced for €154 million, resulting in a significant loss. The diverted funds were reportedly used to cover payments to affiliated companies despite lacking operational justification.
Liberty Steel's Galați plant is reported to have received substantial financial backing from the GFG Alliance. External auditors purportedly issued clean audit reports for the periods encompassing the transactions under scrutiny.
Liberty Steel and the GFG Alliance deny any wrongdoing, stating their intent to vigorously defend themselves. They maintain that the Galați transactions benefited the Galați operations and were reviewed by independent external lawyers with auditors confirming compliance during the relevant periods.
This investigation arises amid broader difficulties for Sanjeev Gupta and his business empire following the 2021 collapse of Greensill Capital. The UK Serious Fraud Office has been investigating GFG and Greensill since 2021. Gupta has since lost control of several assets, including Whyalla in Australia and Liberty Steel UK's South Yorkshire operations as of August.
