Greensill suspects' homes searched in Germany

Prosecutors in Bremen — the seat of Greensill Bank, which is now undergoing court-ordered insolvency proceedings — disclosed on Wednesday that the homes of five people had been searched.

The searches, which took place on Tuesday, were conducted in the neighboring state of Lower Saxony and in Munich on suspicion of accounting fraud, a Bremen prosecutors' office spokesman told the German DPA news agency.

Greensill Bank's windup was ordered by a Bremen court in March, leaving several dozen German municipalities fearing loss of deposits they had made hoping to benefit from interest rates above the market norms.

About 21,000 private customers have been refunded under a deposit-protection plan, the German BdB banking federation announced last week.

That legislated program safeguards an individual's deposits of up to €100,000 ($120,000). It does not protect institutions or governments.

Refunds for another 1,000 private depositors were pending, assuming that they could provide the proper documentation, according to the BdB.

'Supply chain' financier

In Britain, the failure of the parent firm, Greensill Capital, which specialized in "supply chain" financing for manufacturers, is to be scrutinized at a parliamentary inquiry to begin hearings on April 28.

In focus are former Prime Minister David Cameron over his part-time lobbying for Greensill Capital and current Chancellor of the Exchequer Rishi Sunak's role in examining state-backed pandemic funding for Greensill, a plan ultimately dropped.

Last week, opposition Labour leader Keir Starmer said "cronyism" was at the heart of a "broken" British system that needs overhaul. Last Sunday, Cameron insisted that his work did not break any rules for former ministers.

Also scheduled to testify before Westminster's committee will be Lex Greensill, an Australian banker and former adviser to Cameron's 2010-2016 Conservative-led governments.

British media recently dug into Cameron's role after Greensill Capital's collapse forced the owner of Liberty Steel to seek a government bailout, with 5,000 jobs at stake.

Trust again being 'gambled away'

Last Monday, German President Frank-Walter Steinmeier alluded to the failed Greensill Bank and his own country's Wirecard affair while warning domestic bankers at their annual conference online not to again squander the trust that they had sought to rebuild since the global financial crisis of 2008 and 2009.

"Fraud damages the foundation of the financial system as a whole — regardless of who is responsible," Steinmeier said.

"Cases such as the insolvent Greensill Bank in Bremen and, even more so, the Wirecard case, are likely to gamble away the trust that has been painstakingly regained," he told German bankers.

ipj/msh (dpa, Reuters, AP)