The raids last week at the Paris corporate office and the Aluminium Dunkerque foundry were part of a preliminary investigation opened in July last year and is being conducted by a specialised financial crime brigade, said a source close to the case, confirming a report in the Financial Times.
Gupta and his Liberty Steel firm was once seen as the saviour of British steelmaking.
But Liberty Steel, one of the world’s top steel groups, has been fighting for survival following the March 2021 collapse of Greensill Capital, the main lender to its parent company Gupta Family Group (GFG) Alliance.
British authorities are also investigating the GFG Alliance.
“The French authorities came to our offices in Paris last week as part of the investigation underway,” a GFG Alliance spokesman told AFP.
“We strongly reject any suggestion of reprehensible actions and we continue to cooperate fully with French authorities to help them complete the case rapidly,” he added.
The French case initially targeted a state-guaranteed loan made by Greensill Capital to GFG-owned foundry, Liberty Aluminium Poitou, said the source familiar with the case.
It later expanded to include Aluminium Dunkerque, Europe’s largest foundry, whose takeover last October by the American Industrial Partners (AIP) private equity fund is contested by GFG.
According to the FT, the probe is looking at a deal concluded with Swiss commodities group Glencore to block the takeover and the use of €25 million from the foundry’s accounts to settle a legal dispute with Rio Tinto, the Anglo-Australian mining group which sold the foundry to GFG Alliance in 2018.