The 2017 accounts for Two Brake, a company owned by Gupta Family Group Alliance boss Sanjeev Gupta, have been amended, with the unit flipping from being dormant to having assets of £405.48mn and creditors of £412.84mn.
The unaudited amended micro-company accounts were only signed off in August this year, suggesting the company found an error whereby the original accounts did not reflect transactions involving Two Brake.
Two Brake is able to file micro-company accounts because of its revenue and net asset value. It had net liabilities of £7.35mn in 2017, which grew to £66.7mn of liabilities in 2018 when it had assets of £44mn, down by £361mn year on year, and made a loss of £59.3mn. It also had "other receivables" of £327mn in 2018.
The amounts owed to and by the company across the results suggest it bought and sold an asset without being paid, but it is not clear where Two Brake's assets or liabilities come from.
A number of former GFG employees told Argus Two Brake was only discussed internally on a "need to know basis". Even some employees in finance roles were unaware of its existence.
"Two Brake was an entity not talked about and anyone asking for documents about it was faced with a lot of ‘why do you want to know that?' questions," one former executive said.
Some suggest Two Brake may have been a vehicle used for moving money into Australia. On 31 August 2017 Liberty acquired Australian producer Arrium from its creditors for around A$700mn with the cash consideration closer to A$640mn, according to sources with knowledge of the negotiations. Arrium collapsed with debts of A$2.8bn in April 2016. The revised £405.48mn assets of Two Brake for 2017, at the pound sterling/Australian dollar exchange rate of 1.62 on 31 August 2017, was around A$656.87mn.
A spokesperson for the Gupta Family Group Alliance, the loose-knit collection of companies including Liberty Steel, declined to comment.
In May this year, the UK's Serious Fraud Office said it was investigating "suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance, including its financing arrangements with Greensill Capital UK".
