TRASHFUTURE - *UNLOCKED* Bride of Frankenstein's Balance Sheet feat. Rob Smith

Episode Date: May 2, 2021

Contrary to popular belief, we were not the people who broke the story about Lex Greensill and supply chain finance -- we just fell in love with it because it was the perfect intersection of all our interests (tech bullshit, obvious fraud, Australians, guys). However, someone who has been on this story since its inception is Financial Times journalist Rob Smith (@BondHack), and he's on the show today to review what's happened in this big ol' mess-er-idoo. If you want access to our Patreon bonus episodes like this one, early releases of free episodes, and powerful Discord server, sign up here: https://www.patreon.com/trashfuture We support the London Renters Union, which helps people defeat their slumlords and avoid eviction. If you want to support them as well, you can here: https://londonrentersunion.org/donate Here's a central location to donate to bail funds across the US to help people held under America's utterly inhumane system: https://bailproject.org/?form=donate *WEB DESIGN ALERT* Tom Allen is a friend of the show (and the designer behind our website). If you need web design help, reach out to him here:  https://www.tomallen.media/ Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and Alice (@AliceAvizandum)

Hello and welcome back to this highly anticipated bonus episode of TF and making the Financial Times's HR regret their decision already. We keep doing like serious bits of investigation that make people with their full names on their Twitter accounts and like their profile pictures of them in suits go interesting and quote tweezers and then when they actually listen to it, it's all of us just making moaning noises because you have to pay us to listen to this episode. Yeah, that's right. What happens when you come in space?

We're joined by Rob Smith in the Financial Times. That's right. So, but actually it is Riley Milo and Alice and we are talking about Green Sill the thrilling conclusion question mark and we are joined very pleased to be joined today by Rob Smith from the FT. He's at Bond hack on Twitter a long, a long time coming. Rob, how's it going? Yeah, it's great to be on.

It's a bit surreal to be honest, but yeah, it's wonderful to be here. Previously, we just had to have like illicit dinners with Rob like he was deep throat talking to him about Green Sill. We went to Lahore too, right? Lahore and Hawkebab House. Was it Lahore 1? It wasn't Lahore 1 either. Lahore 1 and 2 are run by a separate guy who's trying to steal Valor from Lahore

Kebab House. Yeah. Do not give that brand your business. You're right. We went to Lahore Kebab House. He's a fraud and a liar and a charlatan. Allegedly. I remember I ordered what I thought was an okra curry and then it was a lamb, an okra

curry and it was like the meatiest thing in the world. And I'm not a vegetarian. I just wasn't expecting lots of meat. There you go. Unexpected meat available at Lahore Kebab House. By way of starting though, I would like to issue a hearty congratulations from the Trash Future crew and Rob Smith to Green Sill and all of its subsidiary companies who's sailing her for finally appointing an auditor.

It's just a shame about the circumstances under which they got an auditor. Are they good? Are they good circumstances? Yeah. Is it a guy just like filming outside their office who's, and there's like, can you please stop doing that? And he's like, why? It's my constitutional right.

No, because Green Sill, much to the surprise of everyone here, has gone into administration. No, but their business model was so good. That's right. I just want to start though, with a little bit of a preface, a section I call Three Men in the Desert, before we talk about sort of what happened. Okay. This is your album cover. Yes.

So this is an article that sort of I got from the FT, I believe it's one of yours, where we talk about how Lex Green Sill, David Cameron, and Mohamed bin Salman, dream blunt rotation, all went on a camping trip in the Saudi desert with a single dead pig. So could you, okay, Rob, could you tell me a little bit like what was the nature of this camping trip and was it better or worse than the comedy vehicle with Dax Shepherd comedy vehicle without a paddle? Yeah. So we learn about this camping trip, I guess, because unsurprisingly, Lex Green Sill really

liked telling the story about this camping trip. So we talked to like three people who he told the story. Obviously, MBS, Mohamed bin Salman, is one of the big investors in the vision fund or rather Saudi Arabia is. So there's a link there. But yeah, they went camping in the Saudi desert and Lex told people that him and MBS bonded because they both studied law and they like, they had like a long chat about law. They're just big fancy boys.

They just both really like law and legality. So they had this like big long chat about it. Why he's called Lex? Yeah, indeed. The Lex Green Sill, brought in by the tribunes in 34 BC. I think you'll think it's the Lex Green Sillia. Yeah, that's right. Yeah, Prince Mohamed, a guy known for his MBS, known for his real adoration of and respect

for the rule of law. Indeed. How many of his relatives are still trapped in that merry hot? Like 70. He was a Hilton. I think point of technicality. I think it was a Hilton. We are under arrest in Hilton.

So, Rob, so they go on this true, this camping trip together and they basically just like, I don't have a bonding session like in the outside the back of Corsica Studios. Yeah, talk about what they studied in university. I mean, essentially, I mean, like, I mean, one thing I should say about this is like Lex Green Sill told this story a lot. And we've managed to track his private jets. My colleague, Cynthia Merchu, who's basically like a secret service agent, knows how to track people's private jets.

And we can... Fuck that guy loves planes. I forgot about that element. He's a plane guy, I think. Yeah, he had four, but they were funded by the bank that's now in the criminal investigation. He has like over a hundred that were like loosely linked to him at some point. They wouldn't own them, but they were like under his... He had four, but that is a lot of private jets for like any one company.

But no, so we can see that his private jets were going to re-add around that time. But like, as you probably know, we've asked David Cameron about this and he's just ignored every inquiry we've put to him. Weird, right? So we have... David Cameron didn't bond with MBS and he's kind of like... He kind of felt a bit cut out. David Cameron didn't study law.

He studied PPEs. He had nothing to talk about. David Cameron had white-eaten and just like couldn't communicate with anyone, but the other two were like really having it deep in meaning for him. Cameron's such a nerd. But yeah, I mean... The corner reading John Stuart Mill. I think like the obvious thing here was like Lex was trying to supply chain finance a Ramco.

That was the whole kind of grand prize. And it didn't end up happening. It was kind of weird. Like they had a head of Saudi Arabia at Greensall who actually spoke at this like FinTech digital conference, which was organized by the Department of Trade. But they don't actually seem to have ended up doing that much. Why would you need to fight supply chain finance an oil company? You don't!

You don't need to supply chain finance. Their supply is the ground that they own. Well, I mean, I think this is the question, right? And it's like a lot of this thing. Like there's probably an appeal to it. If you want to use it to window dress your balance sheet. I'm not saying that a Ramco did want to do that, but we know that there are advantages around this.

We're saying one could use it for some sort of fraud. We're not saying that anyone did. Public crisis in a Ramco recently that would require them to make themselves look a lot more financially healthy than they have been. I mean, in fact, this is this is a bit of a theme. And it's a theme we'll be talking about a bit this episode, which is Lex Greensill's mission to insert Greensill into transactions where it makes no sense for it to be there.

And generally most of the time getting laughed out of the room. Oh, any transaction. That's right. But what I think is really interesting though, was the way that Greensill's trip to to Riyadh connected not just with his own ambitions to to basically insert an unnet, basically just take a cut at no benefit to anyone else of all the profits of Saudi or Ramco in exchange for potentially window dressing and balance sheet was rather Masayoshi Sahn's plan to put Lex Greensill's company at the center of a bunch of other companies,

all of which have about as much substantively valuable to them to basically recreate the world in the image of this slick technologically advanced utopia almost. The vision was right. And this was what they went to Saudi Arabia saying they wanted to do. The pitch was soft bank is going to reinvent Saudi Arabia because Saudi Arabia has ever since MBS took over. He's been trying to reinvent it, but he's not very smart. And so he keeps reinventing it in ways that don't really make sense and could be construed

as scams. So he's he's delineating stuff. He's making stuff longer and thinner. You're telling me that the guy who brought the WWE to Saudi Arabia may not be being fully honest and forthcoming with some of his societal reforms. The architect of the line couldn't possibly be a sucker who's easily taken advantage of MBS fully thinks wrestling is real. I'm very excited for like war harvest wrestling.

So but what what's interesting here right is the soft bank is the the the idea of the pitch was soft bank is going to use all of its portfolio companies in the vision fund to modernize Mecca. So the idea was that all different. He loves to be modernized. It actually does. But different companies in the vision fund would play a role. So the startup Katera, which I believe is sort of swiftly becoming non viable if it hasn't

already was going to build a whole bunch of new structures for tourists and hotels. The artificial intelligence company since time would offer facial recognition and OYO would turn those buildings into hotels for visiting pilgrims and Greensill would package it all up into investment products projects to finance the project. We talked about this somewhere. That's your problem. In fact, we talked a little bit about with with Sheamus Malek absolutely about Gulf State mega projects.

And one of them was this sort of modernization plan for Mecca. And yeah, no, we're just going to have entire precinct of luxury hotels. And we're going to out our guy for that is the startup that kills hotels. Yeah, that's right. Awesome. We're going to put the cabal on the blockchain. They're all going to have view windows so they're going to be able to tell what's the others like made at the time was Apple store inside the car.

And I'm so glad that like we've we've now now that Greensill is going into administration. I have removed the ability to leave this for myself. And Greensill was going to be at the center of all of it providing all of the investment products. So essentially all of these startups that don't do anything fail all the time and just sort of exist to raise money from investors were going to be financed by this other thing that really just exists to make other companies look good so that they can raise money from investors.

Does that about the size of it? Yeah, I mean, I mean, like Lex was trying to securitize the hodge basically is what was happening. They were trying to like turn, you know, Mecca into this like modern Blade Runner style like Pilgrim. Blade Runner 1149. Exactly. And the idea was that like, so you've probably seen there's a great clip of this.

Massa Sons like he developed this nickname for Lex, which was the money guy. That's such a good nickname. So he used to say, he used to literally say, this is the money guy. And like, I think Massa one time like just became so bewitched by Lex, he thought he could like supply team finance anything. So yeah, if you think about it, if like Massa is wanting to help Saudi Arabia, who one of his biggest financial backers, like create a futuristic like Hodge 2.0, the money guy is Lex Greensall, right?

Who are you going to get to put the financing together? It's going to be Lex Greensall. Yeah, this guy who can Nathan Barley's Hodge. Look, business is about believing in yourself and your friends. Skateboarding around the car. Effectively, yeah, it sort of is. And Greensill's ability to just sort of create these notes, create these notes out of like future sort of flows of cash.

Well, it's essentially able to, so long as you can sell the vision, you can sell the derivative. And that's essentially what this was. It was a utopia. It was a utopian vision of the world that was dreamed up by very stupid people, essentially. And they were going to start it in Saudi, but there was also, there was a meeting with another former Prime Minister. Where would you naturally begin a utopia?

Saudi Arabia. There was another meeting with another former UK Prime Minister trying to do the same thing in Indonesia, but this was Tony Blair. But otherwise, the people at the meeting were the same people. That guy's never been involved in anything under that. Lex Greensall's in that meeting. Like you can watch this on YouTube. And yeah, Massa introduces Lex, I think to the Indonesian Prime Minister as the money guy.

And Tony Blair stood there in the background kind of smiling. It's exactly the same thing. Yeah. This is the war crimes guy. But yeah, it's exactly the same thing that like Massa had this idea that he could create these kind of Blade Runner style utopias around the world and obviously Lex, the money guy, Greensall. Because that was the point of the film Blade Runner.

That was the point. That is great. And this is like, this is how society should be. That's right. I read this amazing book by George Orwell as far as some animals have a great farm. Yeah, that's right. It's such a fun story for kids. So it's essentially right is what we what we have here is yeah, it is it is the future

as dreamed up by by people who will have a product to sell and frequently that product is just some shit they sourced from somewhere else and they've got some wonderful power points to sell you financing related to it. Beautiful power points. So let's let's talk a little bit about this. Let's talk a little bit about what actually happened with Greensill and I write if we want to talk to number one. I'm going to insist that you go back and listen to episode one of our Greensill coverage

because I don't think it's net. We should necessarily spend this time like going back through like what Greensill does do the reading. If you want to understand what if a Swedish man was Italian, you're not going to be able to do that without doing the homework. Okay. It's not our job to educate you. Okay.

So fine. In brief, in brief what this company does is Greensill will take any future revenue stream frequently sort of the supply chains of big firms. So telecommunications firms were always the big ones of Vodafone and say, hey, we're going to put ourselves between us and your suppliers Vodafone. Your suppliers and so you don't have to pay them. Yes. Your suppliers then can pay us 98% of the invoice amount today and you pay us at some later date

100% of the amount and we pocket that difference and that's how we make our money. We get the money to pay your suppliers by selling a credit instrument to someone who will buy it, frequently credit Suisse. And that was the nature of the game. The reason that this is sort of so controversial is that a lot of these sort of supply chain financing doesn't have to, if that's what it's called, doesn't have to be written down as debt. So you can make a, you can pump a lot of money through a company and make it look like a

sort of viable firm when actually it's not. So the collapse of Carillion was related to this, Agritrade, NMC, Healthcare, Now, Greensill, et cetera, et cetera, et cetera. And also a big controversy I haven't ever visited. A lot of these companies were never going to pay this debt. No. No. Anyway, so that's, that was valued at $7 billion as part of the soft bank vision fund is now

valued at how much? Zero. Yeah. Nothing. Precisely nothing. In desperation, they turned the supply chain finance around themselves. That's better than minus $7 billion. Well, I think like just cutting in, like what's really interesting here is like a bunch of

the corporate collapses you just described, like Carillion, NMC, they were all kind of like sped up by supply chain finance. Like they all kind of, they hit a bump and then everything just unraveled really quickly. So it's kind of interesting that the guy who did all the supply chain finance has had the most dramatic unraveling of all. Like just supply chain finance, like squared or something. Maybe this is 70s and he's just doing market research. That's right.

I'm trying to make my company more similar to the company's I finance. So back when we first talked about this around this time last year, maybe a little later, slightly under a year ago, we were just sort of looking into this and kind of our heads were exploding, sort of coming to understand this product. And what I don't think we knew at the time, I don't think anyone knew this at the time, was the kind of, the writing was already on the wall for Greensill's collapse, right? Because this is around when it turns out that the, its credit insurance had become quite wobble. Yeah.

Yeah. And because what had happened was, right? Cause all of these, it's insured against defaults for all these crazy things it's writing. And it turns out that all of that insurance was provided by one guy. The insurance guy. Oh no. You've got a war crimes guy, you've got money guy, and you've got an insurance guy, simple as. So there was an insurance guy just like works at like a small insurance company in like fucking Darby or something.

It's got to be. I can show that for you. It's from Darby. Basically. I've like D northern my accent. So what happened was it was an inch, it was like an Australian sort of like, you know, financial insurer called Bond and Credit Company. But the thing is based in Darby, right?

There was a new South Wales thing is it was, it turns out that there was just one guy there, Greg Brereton, who massively wrote in an excess of his authority. So Greensill should never have existed in the first place because it was insured by a guy who made a mistake thereby causing an enormous, how enormous financial file. What you're saying is that like all of the times on the original Greensill episodes, when we said this shouldn't exist and there is no reason for this to exist. We were fucking right. Yeah.

I mean, I think so. I feel like it was in May 2020. It was warmer than this. I remember that. I have a temperature based memory. So I think Greg Brereton and obviously he's been accused of this. You know, it's an internal investigation, yada, yada, yada. I think he was thrown out of the Bond and Credit in like June or July.

So it was just four. What's quite funny was I was actually on my like first post-lockdown holiday in Cornwall and I got a WhatsApp from my contact saying, oh, that guy in Australia who writes all of Greensill's insurance just got fired. And I was like, wow, that sounds like really important. I kind of like did a bit of digging into it, but I was like, I've got so many other Greensill strands to like dig into. I won't dig into that one.

Yeah, it turned out there are a few other points, but it turned out like, oh, wait. Yeah. That was kind of the point where the bottom card in the house of cards got like knocked out. I love that. Like the bottom card in all of these house of cards is always like some fucking idiot. Yeah. Like it's just some kind of all insurance guys are the same. It doesn't matter whether they're doing you a dodgy deal on your fucking house insurance

or a dodgy deal on like the entire economy. It's always like some geezer in an office somewhere. That's like a 2-2 in like fucking, I don't know, like sports science. It's just like, yeah, I reckon I can insure that. Well, this Greg Brayton guy, like he's, so we did a profile on him. He's basically like a really nice bloke, but he's like, my colleagues. How's the guy? I'm very funny.

I'm surprised I didn't do that. I love the guy. He should do something else. No, but this is a thing. So like, it's just like a normal guy. Like he loves rugby league. He loves cricket. You know, there's a tweet where I think he tweets about the reception in the Sky Sports Bar,

not being good and like that kind of thing. A regular guy who likes to grill. That's so fucking weird. This is exactly why I'm envisaging. Like as part of like, like running it, running it, even though our podcast, our business is a podcast business, still running a business. I have to deal with a lot of like brokers and stuff for stuff like insurance, the loans, whatever.

And just like they are, it's a type of guy. And that is the kind of guy it is. This is the thing. I was just going to say like, so you can actually see this in the credits with funds. Like I know like you dug into credits with funds. You could see a breakdown of the insurance. So it was like IAG and Tokyo Marine, which is a Japanese company. And they were like basically like 70% of the insurance together, but they were basically

this one subsidiary in Australia. It had been sold from IAG to Tokyo Marine. So that was like all the same thing. So like, if like, I don't think any journalists, we all kind of could see the insurance as a weak point, but I don't think none of us were quite clever enough to work out like, oh shit, like more than three quarters of the insurance or whatever it is. There's this one guy down in Australia. Sort of nice guy.

And quite literally $900 he does. So what happened was... I said, could I insure this? And I said, well, I think I could do that. What happened was as sort of he was, as this company was being acquired by Tokyo Marine, they reviewed the books and were like, wait a minute. Why are you insuring that? Who let you insure that?

Do you work here? And then immediately they're just like, no, of course we can't insure that. The big hit man's suspicion meter just filled up instantly. And it was just like, hey, who are you anyway? What are you doing? This guy's just dressed up as an insurance broker. Yeah. And so like, of course he was fired immediately.

And then green silk began to slowly... Frank man, Greg Grayson. The guy that you endorsed at this Australian broker, you're going to find the real one of him in a supply closet knocked unconscious in his underwear. Yeah. While I don't think Agent 47 pretended to be an Aussie insurance broker. Like, I think it is a bit implausible that this one guy in Australia was the only guy who had any knowledge of like all the bad insurance that was being written.

If you see what I mean. I don't think he had any knowledge. Exactly. Like Tokyo Marine, it's like this big Japanese company, they like bought this insurer. And then after the fact, we're like, oh wait, look at this. Like, I like to do my due diligence before I buy things. It's quite... Yeah.

It's quite... The thing is, like whenever... The thing about green silk is that anytime you answer a question, you answer it in a way that produces nine more questions. And a series of allegations of serious illegality. That's right. So basically right after this behind the scenes sort of insurance fuck up kind of basically made the company non-viable in the medium term.

Then we had the allegations of circular financing at Credit Suisse. We had things come up like some of the dodgy dealings with Sanjeev Gupta, which we will get into in more detail. We had them still saying they were going to IPO in December. And the most bizarre thing of all, Lex Greensill, as this was happening, didn't leave Britain. He didn't like, for example, move to Dubai with his millions. You know what I think it is? Which is what I was in his...

I was done if I was in his position. I think it is genuinely a case of psychotic optimism. Just believing that like you and your own talents and your many, many highly placed friends in the Conservative Party are going to take care of it. And so you don't need to get out ahead of it. The thing is, when you own a big reservation in Cheshire on which you may or may not come the most dangerous game. It's the sort of reservation on which you might hunt the most dangerous game.

I'm not saying that he does that. You just pick up and leave your most dangerous game hunting organization. If you were doing that, that both takes a lot of money for upkeep. And also, you can't, you know, say you've got cages filled with, let's say, people. You can't, you know, you can't just leave and not feed them. You know, you need guys for that. One guy, one Australian man. One Australian guy, the people feeder.

Right. But so do you think that like this is a case of like psychotic optimism? Well, I think, I think it's interesting. Like you might have seen this week, we kind of published some audio of Lex talking to his staff. And I think it was three weeks before they filed for administration. And he said, like, we have an enormous amount of liquidity. And on these funds, like your credit Swiss funds, which like two weeks after this, they got like pulled because they found out about the insurance time bomb,

which has been ticking away, like almost since Greensill episode one of trash future. It's been ticking away. You're telling me this is just one guy in Australia? But basically, Greensill was like talking to his staff and he said, like, these incredibly robust funds and he said all this stuff. And like, I think he believed it. Like, I don't think he was like lying to his staff. I think, I think like the amount of self belief it was palpable.

You know what it is? It's the one of if you want to understand Lex Greensill, the man, I think the text, the text that you can do that through his death of a salesman, someone who truly, truly believe he's a Willy Loman guy that by knowing the right people, by glad handing the right ways that you can kind of bend the laws of physics and these you're a moribund steel plants that you're not only the laws of physics, but that these moribund steel plants that you've written three years of receivables notes against are suddenly somehow through the magic of your own brilliance going to fire into life

and you will, you know, be a hero. Oh, fuck. He's Alan Partridge. The Daily Mail called this show moribund tonight. I will be having knives thrown at me on a right. Is that moribund? Your silence speaks. I mean, the thing is right.

The interesting question to me is what does it say about the sort of fragility of our now primarily scams based economy that this can work for a while providing, you know, one Australian man. Yeah, I just want you to log on to claims dash refund dot co dot UK to pay some excess shipping on your roll mail delivery. That's right. So I'm interested, right? What do you think this does say before we sort of get into some of the specifics

about the fragility of our scams based economy? I think what's interesting about this is like, so, you know, I'm one of these people like financial journalists have been writing about Greensill for years, but I'm not the only guy. There's loads of like Duncan Maverin. He's a financial news in the Wall Street Journal. Luca Casaragi at Bloomberg. John Collin Ridge at the Sunday Times.

So he does a lot in Gupta. And like, we've just all been writing different news stories for years, which are basically spins on. None of this makes sense, right? And it's just kind of stunning to me that, like, you know, most financial journalists, we're not actually trained in finance. We're like, we kind of learn on the job how to ask questions about it and stuff. And it was kind of screamingly obvious to us,

it was screamingly obvious to a comedy left wing podcast, like just how unsustainable it is screamingly obvious to one member of the comedy left wing podcast. Yeah, we've seen. Yeah. Who's saying who can't be here? I was like, why is that guy's name Mr. Masayoshi? That was where I was at.

But like, this MF called. This wasn't screamingly obvious to obviously SoftBank, obviously David Cameron, like Credit Suisse, most importantly Credit Suisse's clients. So this was actually a Bloomberg story. They had that one of the Katari Princes put $200 million into one of the finance ones. They're so smart though. Yeah, that's how they became Princes.

They work their way up. You work your way up from Marques to Prince. Yeah, you start off at like Janus area or whatever and then you get up to Prince. I was talking to someone in like a Swiss hedge fund guy who's actually like really smart. I was talking to him about this and I was making this point this week. Like, to me, it was just like so obvious this was nonsense. And he made a point that like, there was a lot of complexity in Greenswell's pitch, right? So it was like, oh, we've got the insurance and then we've got this and that.

And you know, suppliers pay and like blah, blah, blah. So like a lot of people when they don't understand something, if they consider themselves smart, they don't like to admit that they haven't understood it. So they just go, oh yeah, that's great. It works, works great. Rather than going like, no, but wait a minute. There's like a steel magnet beneath all this and none of his business makes sense. Instead of asking the question, is this just a guy?

Oh, essentially. No, it is a company called Greg Brereton LLC. No, no, it is just a guy. That is a guy. So what happened right was essentially all of these people, the sort of the world's financial elites, some of the richest people, the controllers, the most money, high-end politicians and stuff, everything,

everyone kind of got taken in. And also Matt Hancock. No. He was taken in by something. He had a nice social drink with David Cameron and Lex. Matt Hancock was groomed. Okay. Matt Hancock cannot consent.

Yeah. It is not fair. Yeah. It's like they both had beers and they put a bowl of water out for Matt. No, a bowl with his name on it in diamonds. So what happened right is that all of these people were basically taken in by an infomercial because they were too proud to say that doesn't make sense to me. Yeah.

Even I don't understand this. Can you explain it like slower? Can you explain how this is not just a guy? So it's as though like these are some of the easiest people to scam in the entire world. Man, it's almost as if we shouldn't be building large parts of our economy on these people's ability to fetishize their own intelligence. Well, it almost goes back to a kind of longstanding trash reaches theory, right? About how almost the way that these people get into these positions is by not really paying attention

because the whole, like the system benefits from these people not paying attention and all kind of like scamming each other in a sort of mutually beneficial way. And if you have a bunch of people in those positions who are going like, wait, hang on a minute. This is just a guy. Then the whole thing falls down. So that's no good. This is like, so this is a common theme in finance.

So like you did a fun episode on Lars Windhorst, right? Which is like, he's another guy I write a lot about. Broadcast live from the Renault Clio in the sound play room. So like, and it was quite funny because he made some parallels between Lars and Lex, like they both love paints. But one contiguous theme is me and my colleague Cynthia, who's like this brilliant weird investigative journalist. I mean, weird as a compliment.

And she's just one of those like people who will like dig through every filing in the world. We don't know anybody who's weird as a compliment on this podcast. So we also did that. So we wrote a story about this fund, H2O, and it literally meant eight billion euros were withdrawn from H2O. And a year later, the French regulator like froze all the funds. But what we did was we just read their fund accounts properly. And like, no one actually does this.

So when people invest in funds, they just don't look at what is investing in. And when we looked at it, we're like, okay, there's like eight boxes in here. And they're all just Lars Windhorst in various different boxes. It's just Lars Windhorst in glasses. Yeah. Lars Windhorst dressed as like a sexy lady pushing out his ankle. It's the same thing with...

It's exactly the same thing we're credits with. So like we'll get on to Sanjeev Gupta later, but we had a story this week about his invoices, right? His really great invoices. It's from companies he knew super well. Well, exactly. But like some of these like receivables, as they're called, were listed in the fund.

And we had the invoices as well. But we rang them up and they're just like, yeah, we've never traded with Sanjeev Gupta. Like this was disclosed. Like this was there. Credit Swiss could have rang these companies at any point. And they just didn't because you don't. Why would you?

Why would you? cocaine is a hell of a drug. That's the mark of a great order. So look, I want to sort of talk a little bit before we go sort of too much further. I have this question, right? That I've been sort of turning over in my head for the last sort of eight months or so, and there have been different answers to it kind of each time, which is what really was Greensill?

Because it claims it was a tech company. But as a matter of fact, isn't everything these days, didn't really have technology. It licensed some relatively like, you know, okay invoice analysis software from a third party company called Talia. But it didn't develop any technology in house. My new start up called fraud, but it's just like this is no you. It's just an A with that weird scale and alien circle over it.

Most of it. So it didn't have any technology. Most of the loans that it sort of wrote were again a massive amount of them, like two thirds of Greensill Bank and Bremen was related to Sanjeev Gupta. It was just this one guy. What the fuck was Greensill? Look, I think it was sort of an expression of a guy's vision. It was a vibe.

It was a vibe. I mean, so like Bloomberg had a great story, which I was really annoyed. I was really pissed off at getting scoop tax. I kind of knew it as well and like messed it up. But they had the great story that he supply chain financed his neighbor in Cheshire. We spoke about that as well. He had a school. My brother is literally texting me about Greensill right now.

That's how you know it's mainstream. Supply chain finance yourself and everyone around you. But yeah, he, I mean, look, his neighbor was doing a worthy thing. Special needs school. But yeah, he supply chain financed his neighbor. And I think like that's the kind of story which sums it up for me. Like, I think he just had like a lot of enthusiasm and thought this product could work. So he got in way over his head on some stuff, like on the Sanjeev Gupta thing.

I think he just got way in over his head by being like, wow, if I provide enough supply chain financing to this guy, we can revive the British steel industry, which spoiler alert isn't working. No, it's weird how if you don't have enough money to pay your suppliers doing supply chain financing to retard the point at which you can't play your suppliers. Actually, it doesn't make your business any healthier. So I think like it's a really funny thing for me is like on my origin story and covering this. So like I first wrote the words Greensill Capital in a story in 2014.

So like frigging years ago. And it's because he was like really involved in like one of the first kind of financial shenanigans story I did. So it was this company called Avangoa and it was like kind of like Spanish Enron. Like no one's gone to prison or anything. Don't worry, that's percolating. I'll come up with something perfect. I can hear the accent in your head. What if Enron was Spanish?

Yeah. But I believe it's not all it does. But it was very similar and there was like an energy suspect. It was like an energy company and it basically did all this off balance sheet financing and it kind of funded itself and all this stuff. So I did some like it was early in my journalism career. I had some big stories on this company, but they basically they had a they had an entity called Greensill. And because this company was a clean energy company, they called all of their things green something.

So there was like Green Bridge, Greenfield. So I thought Greensill was just like a company name. I just thought it was the company name through which they did like this one form of very opaque supply chain finance. Until someone said like, no, Rob, there's like a Mr. Greensill. There's a guy called Greensill. His name's Lex Greensill. And I thought they were like joking. I thought they were taking the piss.

I was like, no, no, it's just it's just that they're like, no, no, no, like. You realize this company's name is John Fraud, right? So that was kind of it. Like I had this early experience of this horrible corporate collapse he was involved in. And then I kind of filed him away in the back of my brain until I guess it was 2018. We'll get on to him later. But one of my colleagues was digging into Sanjeev Gupta. And he was like, oh yeah, Sanjeev.

He like does a lot of supply chain finance. I was like, oh yeah. So there's this one guy. He does some slightly iffy stuff there called Lex Greensill. And he was like, oh, that's like he's Sanjeev's best friend. They like, they do all this stuff together. That's so cool. They're friends.

So big deal with a guy called Mr. G. Larson. That's right. So I mean, the moving, moving sort of onto like some of the different angles of approach here, right? So I think going back to SoftBank, right? Yeah. Is that Greensill became one of Masayoshi-san's like top stars after the SoftBank investment. That's a fucking kiss of death. Yeah.

So he got the same treatment as Adam Newman and then Ritesh, who from WeWork and then Ritesh Agrawal from OYO. But the presentation, a presentation from SoftBank indicated that. And become death destroyer of hotels. The three of them were artificial intelligence entrepreneurs in quote, the biggest revolution in human history. So move over red October. That's right. Yeah. Move all the way over.

Yeah. Because these three guys, these three guys, all of whom have basically been shown to just like have their businesses kind of be shitty and not work. In one case, just trying to be a machine to destroy the global hotel industry were to be this. I guess what really strikes me about this whole story and everyone associated with it is the disjunct between what they are supposed to be, what they're sold as, what they're compensated as, how they're discussed until the crisis has already happened. The smartest guys in the world. But the disjunct between that and then Rob, what you're talking about, which is just, well, really what they do is they provide your dodgy balance sheet financing to Abangoa, or, you know, they invent a new kind of math for the kids of JavaScript programmers, or they destroy the entire global hotel industry.

What are your qualifications? I know a stupid guy who broke his insurance. Believe me, we're going to need him. And again, it is, for me, it is the utopianism. It is the cheap utopianism that is this papering over just this cynic, what could, again, the difference between cynicism and psychotic optimism in the face of all evidence is basically materially, it's kind of the same thing where it is this either cynical or psychotically optimistic, but fundamentally grasping view of, well, there's no money left. We might as well scam it from each other. Yeah.

I mean, look, I think, I think it goes back to what I said earlier, like to anyone that looked at Green Soul any way critically. It wasn't like, I mean, this is why it was a great story to be a journalist on. Because like, I love writing stories where there are high Vegas odds this thing's going to implode and make you look really smart. This was like, this is like, Welcome to the podcast business. This was like, you know, I don't know, but in a poker analogy, having pocket aces and like to come down on the flop, you're like, yeah, I can just go all in on this. There's a very slim chance this isn't going to end badly. Rob getting a ticker tape that's like Swedish man spotted in Rome.

But also the other thing is this is the last we'll talk about SoftBank for a while is I always I always I have this little sort of mental tally in my head of the people at SoftBank who individually are responsible for insane investment decisions and how many of them came from Deutsche Bank? Yeah. So Colin Phan. Another one. Colin Phan is the mentor of the fan. Another tick for the Deutsche Bank column of people who are doing psycho shit at the SoftBank vision fund. I don't have them in front of me right now, but like a lot of the other dodgy companies that Greenson was propping up with supply chain finance were Colin Phan's investments as well.

Colin Phan is now actually left the vision fund. So like he's kind of left. I don't want to say who's thrown out for bad investments, but you don't get thrown out of the vision fund for that. Anything yet promoted. Why do you think they have the guy who did the mortgage crisis there? Colin Phan is left under a cloud, shall we say? Yes. And I have to say like Rajiv Misra, who you probably know is like Rajiv is like incredibly smart.

Like you can you can say a lot of things about Rajiv. You can't accuse him of not being smart. Colin Phan did the due diligence. He led the due diligence on Greensill. And I mean, it's if you rightly had done the due diligence in Greensill, which you have invested one and a half billion dollars in it. I just put it that way. Higher Riley, if you're a hedge fund and you want to... So I think what's interesting here right as well is that if the same guy is behind a lot of the companies that then got invested in by Greensill,

what it seems to be again is this is much like on the SoftBank side as on the Greensill side. They're all getting way in over their heads to the tune of billions of dollars in sectors that just have zero democratic oversight because they're tech companies, not banks. So moving a little bit forward, let's talk a little bit about Gupta. So Gupta's empire, Sanjiv Gupta, was built on the political valence that there are good jobs that have to come back to Britain at Steelworks primarily. The investors have basically been willing to hand him hundreds of millions of taxpayer pounds in order to be willing to stand on top of those companies, because we have to put this guy on top because we couldn't put the taxpayer on top because, well, that would be an animal farm. Yeah, exactly. It would be in 1984.

And you can't have animals in a steel mill. It would be chaos. Yeah, chaos. You can't put a hot steel on a cow carnage. Right. So it's, and I think it's basically right. He, it was this idea where he said, I will rescue Britain's steel industry. All I need is for Britain to pay me to do it.

All I need is one guy. Yeah. All I need, yeah. And again, the idea that the entire rescue of the British steel industry kind of just stood on the shoulders of this one Australian who wasn't even like Greensill. Who was Greg Berenson? It's just a lot of guys standing on each other's shoulders. Standing on the shoulders of guys. We stand on the shoulders of Australians.

Right. So, and Gupta's empire was sort of built on this weird financial engineering. We spoke about it in the first Greensill episode about his plans to sort of secure and then securitize and then sell revenue streams from the British taxpayer, effectively privatizing lots of subsidies, like green energy and so forth. Yeah. Or the red boxes. Yeah. Or the...

Yeah, they were called the little red boxes. Yeah. The power plant up in Scotland. But this idea that there is this public purse out there that you can privatize. And Sanjeev would do this in many, many different ways. Making himself filthy, fucking rich in the process. But it strikes me again as to why this story matters because these rich people are scamming each other with companies that do fake business. And who cares about them?

But the people, the thing is, right? They create all of these Potemkin businesses, sort of like Sanjeev Gupta does. But then there are lots of people working at them. Yeah. I mean, it's tragic. Like there's 35,000 people around the world who work for Gupta. And so he... I mean, Kelv surprise, he owns a lot in Australia.

So he has this big steelworks in this place called Bayala. And it's like... It's a classic, like thatcherite mill town, but like down under, like the steelworks is like the main business there. And they like love Sanjeev down there, right? So like they threw him a like taxpayer funded parade through the town once. And like his company like sponsors from the local Aussie rules football club and like all this stuff. And he gave this interview over the weekend where he said, like, Bayala is my spiritual home. Like, as we said, like the guy's in Dubai at the moment.

Like, you know, his actual home is the 42 million pound mansion in Belgravia. He bought under his wife's name last year, which we revealed in the financial time. Sanjeev, that's his actual home. But he's been saying that his spiritual home is this poor town in Australia. It's very similar to the Lord's town. The Lord's town, most of this thing where it's like all of these guys scamming each other. If you absent the whole, you know, scamming central government could be, could be fine. That's funny, but they're also scamming the most desperate people you know.

And there is this, when you read about workers for Sanjeev talking about Sanjeev, they say, no, he's a good egg. We wouldn't have these jobs without him, et cetera, et cetera. But I think there is this, this sort of almost dramatic irony here is that those jobs don't really exist. Like they don't, like they're sort of fake because there's no one buying most of the products. A lot of the money that's coming in is coming in for the Sanjeev Gupta companies, not even on the basis of supply chain financing, but on the basis of something that makes supply chain financing look really, really sort of a little rich.

I really love the guy who employs me because I work for 12 hours a day forging a big bar of steel that then goes out of the room, gets melted down, comes back around on a conveyor belt. My forge it again. I am a cow. Because a lot of the Sanjeev Gupta stuff was actually prospective receivable. Yeah, this wonderful piece of linguistic arbitrage, the legs green. So yeah, I guess for your listeners, what is a prospective receivable? So a receivable just means you have an invoice saying that you owe money by someone.

So you make steel, someone's bought steel off you, they haven't paid you yet. You can take that invoice, you can get financing from Greensill. As we have a point this week, a lot of the companies named on Sanjeev Gupta's invoices deny ever doing business with him. So that's one issue could be problematic. Sounds just like a mix up to me. Yeah, it's probably just, you know, we spoke to four different companies and it was all a mix up that they all had the exact same story. Sanjeev Gupta. I bought that, I bought that bar of steel from him that's been forged and reforged 20 times over as many years.

Yeah, that makes it stronger. Yeah. So you've got that. Okay. Which is sort of, you know, I think we use the term suspicions of fraud in the FT this week. So yeah, that's the term I will also use on this podcast. But the prospective receivables thing is like even crazier. So basically that is okay.

So you don't have enough invoices to do all the finance you need. Why don't you just hypothetically decide how many invoices you're going to get in future? And I'm going to give you money up front for them. An IOU for an IOU. Yes. Yeah. And this is like, this is a classic like Greensoul thing of like just putting a pattern of like sort of something behind nothing. Like there's nothing here, right?

He sold this as like the guys in the credits response were like, oh yeah, this is like great because we have the invoices and we have claim on the invoices. Like let's create a bunch of hypothetical invoices that don't exist. Yeah. Raised financing against them. Now there's a variety to the name, dehypothetical invoice. Yeah. I think like one of the really funny things about this is like one of the roots for this in Sanjeev's empire was when he had to pay GAM back. So you know, G-A-M.

Yeah. Yeah. We talked about them in the first episode. Right. So basically what happened was there was soft bank invested in Greensoul, but the money went into Greensoul's bank and it capitalized the bank. And then the bank provided a load of future receivables. And the proceeds of that were used to repay GAM, the Swiss fund. And then as you know, like the bank ended up on the criminal investigation eventually.

Could you write when you use money from one investor to pay back another debt? That's called being stopped. Only there was a term for it. Yeah. Is that some kind of a parallelogram scheme? Yeah. Like if there isn't a term for this type of financing, someone should invent one. Someone should invent one.

Yeah. So it's a cool kind of like conical structure they have going on. Which is good because as we know triangles and cones are very strong. Exactly. Very structurally sound. So right. And this thing in the perspective of receivables wasn't just happening at Gupta. It was happening at Bluestone Resources, other similar companies where he was basically willing to say, look, I have this money spinner where I can sell supply chain notes to investors basically as a cash like instrument.

Something that is so liquid and so dependable that you do not really need to even worry about it. You can treat it as an asset on your balance sheet. Yeah. Fine. Because what's because it's just like the 2008 mortgage crisis because in 2006 the question was what people aren't going to stop paying their mortgages. Are they? And all these good mortgages at the top are disguising all these shitty mortgages down at the bottom. It's just like the 2006 mortgage crisis.

Totally unpredictable to anyone. And so then in this case what happens is, yeah, you've got Vodafone paying its. It's like a stripper who owns eight steel mills. Vodafone paying its supply chain obligations every month. But then it's sort of packaged up in sort of the same product and being sold again in a lot of cases to like banks that are backed by like taxpayers or that are used to like, you know, again, provide basically like, you know, fake jobs that are sort of going to vanish in any moment or whatever. They're all being packaged up together where it's like this perspective receivable stuff and also all this, all the good shit. It's like it's the same scam.

Just it's moved on from mortgages to business credit. Yeah. I think like, so I think as a financial journalist, you get a bit sick of everyone comparing everything to the subprime crisis. But like the analogy actually really works here. And then like the whole thing was subprime was like, okay, we're writing all these dog shit loans. But if we financially engineer them enough, it doesn't matter. Like they're AAA. And that's kind of what was happening here.

Like the investors in the credit Swiss fund, which as you just said, by the way, this was like marketed as credit Swiss's lowest risk possible fund. Like this was supposed to be fair. We haven't looked into any of their other funds. Yeah. They have this other great fund of moon real estate. Yeah. That's right. But yeah, they like the name of star off the credit, the credits, this credit Swiss three card Monty fund.

They've got a whole load of investment in a guy who paints a picture of your dog. But this was the thing. It was like, okay. So yeah, this fund has debt from NMC health and now proven fraud. It has debt from Gupta Steelworks. It has debt from Lex Greenfield's neighbor in Cheshire. Like you don't have to worry about all of that because we've got all this magic and we've got all this insurance. So it's magic by one guy.

Right. And this is a thing. So like, oh, it's got all this insurance. So it's magically double A rated, but it turns out a lot of the insurance hinged on a rugby league loving Australian guy. Just, you know what it is? It's, it's the mundanity. Oh, yeah. It was a guy.

It was a guy who just in the most sort of like official explanation who's just like reach exceeded is less the big short and more pain and gain. It's just that it's the guy in pain and gain who just happens to be a nosary. Yeah. Yeah. Yeah. I'll notarize that. So I think like we can say, right? The thing that Lex and Gupta had in common was that they both realized that the real prize they were after was the public purse.

You know, Gupta successfully lived huge off of public money. As we talked about the man, the Belgravia mansion, privaries, private planes and Lex has spent the last decade basically trying to get his hands on it. So this is now I want to talk about is Lex and Dave. Yeah. So David Cameron is a very smart and capable man. Yeah. He went to Oxford. Yeah.

Exactly. So I think that's the side from that. Yeah. No noted poker file. Right. So Cameron joins the board of Greensill in 2018. No, no, no, no. He was he was an advisor to the board.

Oh yeah. Because that would be a really big deal if he was at joining the board. Greensill did claim he was on the board in the text we've seen which he sent to a wrong number. Which is very funny. I shouldn't have texted the financial journalist investigating me. Incriminating details. He didn't send it to us. I have barfing and investors in my phone in like alphabetical order.

So it's really easy to do. So basically just to kind of you just to kind of agree. So Lex tried to text the prime minister of Australia called Scott Morrison. He just texted the wrong guy. Serious fraud office. Scott Morrison. Yeah. He just said like, oh, you know, prime minister, blah, blah.

He said David Cameron is a board member and a material shareholder. Like David Cameron is not a board member. Yeah. Advisor to the board, but also a material shareholder, which does matter. So we've accidentally texted the obvious fraud office. So I remember that. So Cameron basically joins Greensill as an advisor to the board. Excuse me.

In 2018 and he claims this was before any of the problems with Greensill were evident. Which again, just Greensill at in 2018. Evidence to him. Maybe already has like just a wake of burning and dead companies left behind it. Yeah. Like, I mean, is it you could Google Abengoa Greensill and you would get a ton of my early articles about what happened there. Or indeed you could also at this was the same year that Carillion collapsed

off of the back of a scheme that was drawn up between Lex Greensill and Cameron when Cameron was in office. Like the problems was Cameron's supposed to know about that. That's true. Yeah. So Cameron was said to have, and I'm quoting here, said to have been attracted to the idea of working for a rising star of British fintech rather than a well-established bank. One friend said he, quote, saw it as new and refreshing.

Fucking dummy. The thing I love about this is, yes, he wanted to work for a fintech instead of a bank. He wanted to wear a Patagonia vest to work. He offered me a lilt. But Greensill owned a bank in Germany in Bremen, which is now under criminal investigation. So yeah, the pouring some out. So, but it's again, just the just it speaks to like specifically like we try

not to talk too much about like individuals try to talk about structural forces, whatever, but it speaks specifically to how much of an intellectual fucking mediocrity David Cameron is that he was unable to sort of see beyond that this is a fun young company that's worthy for an exciting Prime Minister like me. Like the guy fucking sees the world in cartoons. I swear to God. Well, I think I want I think one thing to know about David Cameron is obviously he had these share options, which could have made him a rich guy, but like he didn't

have a passive role in this company. He like we talked about early. He went on a camping trip with MBS, right? But he also went to Australia to meet Greg Brayerton, the insurance guy. He met the guy. He went to rugby league. Exactly. So we've all at the FT have just been like envisioning what was the meeting like between

this rugby league. That's probably nice. It's probably really nice. Yeah, but like he and by the way main in this fucking pig can. And also like we've seen photos of David Cameron on the private jets. So you can see the appeal of green soil. If you're a former Prime Minister of the United Kingdom, it's one of the better private jets that you could have been photographed on.

When they told David Cameron even photographed on a private jet. He was like, thank fuck. Lex Greenfield. Okay. Not the other guy. That I could deal with. Yeah. Right.

But it's this is also like it's just his I think like we will get into the relationship between sort of Dave and this company. But what happened sort of after Dave joined the board or joined the board as an advisory capacity, right? He is essentially going cap in hand to the treasury to sort of anyone who will speak to him to try to set basically rattling his cup being like, please make my share options worth millions and millions of pounds. That's the lunch lunch with Matt Hancock.

Yeah, indeed. So yeah, on Matt Hancock's tiny dining service. So the main the big one here right is that David Cameron sends a bunch of personal texts to Sunak's personal phone being like, I would really appreciate it if you would put this thing that no one understands in charge of a bunch of COVID business recovery loans. Matey, would you do us a favor? Essentially, yeah.

It sounds so fucking legal. Oh, it is. It is. Oh, okay. Good. I'm good. I'm glad I was right about that about how legal it is. So I've only talked to Lex Grinsfield twice.

One time was very recently. So one time was a month ago when I cold called him and he accused me of character assassination. Only because you said he hunted people for sport. No, but this is the thing, Alice. I didn't say that. I just wrote a load of rigorously researched articles about it. He should have done the first.

That would have been funny. He immediately said, but you don't know about me hunting people for sport. I just want to clarify character assassination on me to say that I hunt people for sport. And you're just like, I never said anything like that. Well, good. Because if you had said that, then there would have been trouble. And you certainly would not have found any evidence of it.

Suspiciously, very specific denial. Because all of that evidence has been destroyed. I mean, never existed. That's right. So Greensill via Cameron, basically lobbying, again, in a capacity that is not allowed, but also not not allowed by the basis of sort of how the enforcement action has gone. It's kind of Queensbury rules.

Basically being like, hey, could you please this thing that turned out to be a gigantic house of cards full of like basically similar to 2008 financial engineering. Can we center that in the economy more, please? You know, given that it's not that serious of a time and there's quite a bit of money flowing around. I was hoping you could pass some of it through this bullshit. Yeah.

Well, yeah. So this is what I was going to say. Like the other time I've been allowed to speak to Lex Greensill. So I've tried to talk to him on the record many times. It was never allowed. But it's because I was writing an article about all the defaults that happened in the fund. So you talked about some of them earlier, NMC, agritrade, right?

But it turned out I was writing this article in the middle of this lobbying process. So it was clearly, deeply unhelpful for the lobbying process. So unfortunately, this conversation was Lex was off record and I do have to respect that as a journalist. But I basically heard his lobbying pitch for this Bank of England scheme. And the Sunday Times had a great story today where they had, I think it was Cameron's email.

It wasn't to Sonak. It was someone else. And it's basically all these same sort of talking points, like where the bit, I think it literally says we're the biggest FinTech in the UK and we're helping SMEs and it would be nuts, not to give us access to this scheme. We're not a small scam. Let me just put that out there straight away. We're one of the biggest scams currently going on.

You look, the British state could get in on the ground floor of this pyramid scheme. Are you familiar with health supplements? So are we suggesting really with a single Australian man? So are we suggesting that David Cameron did not fully understand what he was basically desperately selling to the Treasury Department? No. It seemed shocking, but I would wager that David Cameron didn't understand all the intricacies of supply chain finance and how it can be used and abused.

That's just a hunch of mine. If only he'd had a bunch of podcasting idiots to explain it sarcastically to him. David Cameron is raising his hand halfway through the three hour green sale meeting to go, sorry, so this guy's name is Mr. Masayoshi. But that's like his name. I mean, look, I'd say I believe to put it charitably, I do not think given an infinite amount of time and patience that you could make David Cameron understand what supply chain finance is.

I think if he had a year to puzzle out its inner workings, he would fail to come to an adequate understanding of it. A concept of this middling complication is fundamentally and profoundly beyond his intellectual reach and it will be that way for fucking ever. And so in a way, he's completely innocent. That's right. David Cameron, too stupid to go to jail. Yeah, that's right.

That's to put him in stupid guy jail. Yeah, the British state. That's right. So what is the public school system if not a kind of stupid guy jail? Yeah, that's right. So look, essentially we have yes, he's basically Cameron is lobbying the British state to step into a bear trap as a favor to him. Yeah, I think I think it's interesting.

Like when you think about so when Lex sort of invagored himself into government, sort of 2011, 2012, that sort of period. So obviously like the start of the coalition and you remember that period. It was all about like austerity and all this, but there was a big emphasis on finding like private sector solutions to things, right? And I think like in Britain. No, this is the thing. So I think like maybe you guys have talked about before a lot of people have talked

about this for even like actually Marina Hyde talked about this who's like a very like, you know, she's very funny like columnist, but she's not a sophisticated financial commenter and her very obvious observation was like, why does the government need to supply chain finance anything? It's got the bank of England. Yeah, it's like they have the money. They don't need this guy's fake money printer. They have the real one.

This did not occur to David Cameron. So there's like a clip where he says, and he gets his name wrong, which is quite funny. He calls him Lex Greenhill. And he says, he says, Lex, Lex, give us a wave. And then he goes, Lex is sorting out the whole supply chain for us. He's the supply chain guy. He's the money guy. Government needs a money guy because if government gets money the normal way,

then you get a Weimar German. He grows money on a farm in Australia. It's amazing. Why grow vegetables which you sell for money when you can just grow money directly? The whole attraction of Greensill to a lot of businesses is you can be like, oh, I can just sort of be my own bank. I can turn my supply chain into a bank basically and sort of, you know, get around a lot of like capital rules.

But the Bank of England is the bank. Yeah, exactly. The bank deposits that are getting supply chain financed into you are initially created through lending that happens supported by the Bank of England. You don't need another one. Are you telling me that the Bank of England is a bank? I thought that was just like a name. You're telling me that this thing's name is Bank of England?

Yeah. This is the thing. So like if you take a step back, like the... So he had a lot of schemes and most... Boy, they have a lot of schemes. The ones which worked in a government context tend to be around the NHS. He obviously had some kind of in that. But like one of them was around pharmacies, right?

Yeah, we're two. I have details on that. Yeah, so it was earned. Yeah, exactly. Pharmacy one was, oh, the government isn't paying pharmacies fast enough. Greensill will pay the pharmacies and then the government will pay them later. Like why didn't the government just pay the pharmacies faster? And that's everyone who was consulted on this pharmacy idea said,

why can't we just pay them faster? Why do we need to insert Citibank into this process? David Cameron is a strong believer in a joke from like a decade ago on Twitter that socialism is when the government does stuff and the more stuff the government does, the more socialist it is. The government can't be paying... The government can't be moving money around inside of itself. We should get a bank to do that for us

because what if we screwed up because we're dum-dums? Which again, in David Cameron's case, is true. Yeah, they were right about that. Yeah, they were right about that. I think one interesting thing about this thing is like, there's a lot of focus on the Tories, right? Because of David Cameron. Like if you put Sanjeev Gupta into the same bucket, right?

Because a lot of Guptas financing hinged on Greensill. Like the political class were just enamored with this. So like Carwyn Jones, who was Labour First Minister of Wales, he joined Gupta's board and then like Acaba, which like never really criticizes anyone, was instantly like, I don't know if that's allowed. Are you allowed to do this? And he like got very angry.

The SNP, so Nicola Sturgeon. Really? Not the SNP, not the world's smartest people. They provided. Okay, but did Alba do anything? I thought not. The devolved administrations are such a great repository of like even dumber guys than investments to politics.

Just phenomenal like Bush League shit. Oh yeah. So this is amazing. And I think it's like an underappreciated part of the Greensill like fiasco is, they're kind of like the origin transaction between Gupta and Greensill was the Scottish transaction. And it was all hinged on a guarantee

the Scottish government gave. And they gave a half a billion pound guarantee, right? And it's to a power purchase contract between Gupta and his father. Hanging out making business deals with your dad. That's what it's all about. The Scottish government like gave a guarantee to a deal between Gupta and his dad

that then essentially got a securitized by Greensill. Collateralized dad obligations. It was a deal my dad was going to take me fishing for once in my life. So I mean the thing I think the key to understanding all of this right is that the in these government and its neoliberal form it must have idiots in charge of things

because the whole point is that the state is stupid. Democratic control is not desirable. We can't have these idiots running anything. Do you really want to put an organization that David Cameron is in charge of at the head of the NHS payments? No, no, no, no, no. These are all dangerous morons.

You need to get this very smart Australian in here with his friend the rugby league guy and they're going to sort all of it out. There is this idea that politicians it's something we talk about actually quite a bit on this show which is being dumb on purpose. It's a British value and there is no more British value than being dumb on purpose for the purpose of

using to know things. For the purpose of privatizing something. I was going to say like I think everyone here went to Oxbridge at this table here, right? It's a very, very embarrassing fact. There's three white males here. The diversity, the only diversity happening on this podcast in any sense.

Alice who is not in the studio is the only diversity. Alice the absolute, the soul of the working people of this country who attended a small comprehensive called Dutch College. I am the most proletarian one on this podcast right now. But I was going to say so like, yeah, I went to a comp and then I went to Cambridge and there were just like a lot of David Cameron type guys there.

Like make a virtue of not knowing details of things. Like, you know, like the whole essay crisis concept like, oh, I've got an essay, total essay crisis. Like, you know, the supervision is going to go fine because like, it's like this like bluffing and blagging sort of, you know, is, and I think that's where like Green Soul is really funny because if you were a detailed person,

you could just like clock this cold. Like if you just went through the funds like went, huh, wait, that's his neighbor and like stuff like that. Wait a minute, that's his dad. Hang on, there's just one Australian guy. Alternatively, if you were on a podcast with a detailed person. Exactly. Yeah. So hang on, you read that paper.

Yo, dude, what the fuck you gay? So this is like a thing is like, no one actually reads things which sounds kind of obvious, but like that is writ large in finance. Like if there's a long document and there's a thing at the start of the document saying like, these are the key details, everyone will just read that

and they won't leaf through and be like, oh wait, it lists the invoices here. Why don't we call the companies named on the invoices? And then you get... If we're going to give him the money from the state, we probably should do it. No, no, no, there's no time. We're too stupid to do that.

Just privatize it. So it becomes Cameron PPE guy saying, oh, Lex is sorting out the whole supply chain finance issue for us without... There was no issue. There was no issue to sort out. All you've done is insert city bank into pharmacy procurement and then made pharmacies lose about 1% of their income

to loans they didn't need to take out. That's what happened. It was a colossal failure, an unmitigated failure. Well, except unless, of course, you're Lex Green, Silver City Bank. Oh, absolutely. It's feeling great right now, I'm sure.

The quote here is that Cameron's government and the very senior civil servants like Jeremy Haywood and stuff, and the quote from the Sunday Times is that they liked swashbuckling business people with their whizzy ideas. Wow. Wow, actually Tom Sharp is going to revolutionize that. It's not even just that they don't read anything

and they just kind of like black their way through everything. It's that they do it in such an irritating, sounding way. Oh, well, they've read the Hornblower book. So I mean, that's something. No, it's that they love jangling keys and they're just going to put more jingling because basically most of what this stuff is, most of all these different privatizations, right?

It's just a game of three card Monty that they're more or less trying to lose because they know that their job is to be the Washington Generals. You know, they're supposed to lose. So a little bit more, because they know we're going very long, just at this very worth what we're spending the time here.

So much here. There's a lot we're going through. So this is on the mat. Sorry, we're not going to get to Matt Hancock yet, but when David Cameron sort of off the back of all this, off the back of shouting him out in meetings, off the back of going on planes with him and verifiable ways multiple times,

off the back of Lex Greensill, having a business card that said Senior Advisor Prime Minister's Office. On a plane with the second worst guy he could be on a plane with. One of his David Cameron's friends was all he speaks to like the press through. Yeah.

So this is just the kind of, this is like a horrible lobby press. You know, like the lobby. They talk about friends and allies of, and it's just when like the guy doesn't want to make a statement himself. Source closely placed. Yeah.

Yeah. Well, Dave, to be fair, David Cameron is still, he's actually trying to call you. It's just all he's allowed to use as a Flintstone phone. It's David Cameron's good friend, a three card Montgomery. And then he first style activist has infiltrated all of these guys phones

and has simply, they keep dialing the serious fraud office, changed all of the contacts in David Cameron's phone to the serious fraud office. The serious office. It seems like more of an obvious fraud office kind of case. But the quote here, right? And remember how much contact we've talked about them having

specific planning meetings, plane journeys and so on. The quote from the friend, David thinks he met him once in the entirety of his time as prime minister, adding that it was around October 2012 when Cameron announced a new supply chain finance scheme intended to improve cash flow for government suppliers. Met him once.

David thinks, I'm enjoying the third person there very much. David's pretty sure he's only met this guy who he's been on a camping trip in Saudi Arabia with one time. Well, the thing is the camping trip wouldn't be very memorable because he didn't get to have that conversation about law. Oh yeah. He was excluded from the conversation.

So he doesn't count it. We're all in ayahuasca and I was having a bit of a whitey. Yeah. They were talking about how they're going to do a flying car thing around the Kaba. Yeah. So the other thing is this trick, these government people,

these high level politicians who just love to get keys jangled in front of them and want to get more jangling keys involved in the business of state. Surprisingly, it also worked on Matt Hancock, which I find pretty far-fetched. Oh, no. No.

He's so sharp. Not the guy who was bribed with a fucking 1300-pound membership to the jockey enclosure. Not that guy. Cameron Greensill and Matt Hancock, another dream blunt rotation. Oh yeah. Went out for...

Actually, that would be pretty fun. MBS I would find more annoying, but Hancock is a beautiful man. I still have it on record. I want to have lunch with Matt Hancock. Yeah. But going down the Chalamet with Matt Hancock. Listen, you can.

All you have to do is know an Australian and you do. So just like, get one of the Boons of Vista guys. Andrew, I need you to call Matt Hancock. Andrew, can you ensure hundreds of millions of pounds worth of supply chain financing so that I can have lunch with a guy

who I think is kind of nice? So basically what they did was they lobbied Matt Hancock to include earned, this Greensill subsidiary, as a rollout to pay NHS staff on a daily basis. Greensill said it was his treat to the nation. So fuck you. No, he literally said it was his cup of tea.

Cup of tea. That's the one. Basically, like Pratt had done a thing where, like if you... So this is the first wave of coronavirus. Remember how, like we were all terrified, right? It was a very weird, terrifying time. We were like locked in our houses.

And while everyone was locked in their houses, Lex Greensill was beamed to the nation on Sky News to explain how he was going to help NHS workers on the front line get paid every day and that this was going to be amazing. And he said that Predamonjay had just announced the free cup of tea for every NHS worker. And he said, this is my free cup of tea.

Yeah. They get this thing that in the long run means that Citibank is going to take a percentage of the entire NHS payroll. Or Greensill. Or Greensill, yeah. There's a lot of financial institutions involved. But this one was Greensill.

So he did this for free. So what's interesting here is, you know, I said he tried to send that text to Scott Morrison, the Aussie PM. Yeah. And then did another brain genius individual while we're at it. But he sent it to the wrong guy. We ended up seeing the text.

And he was offering the same thing in Australia. And he described it in the text as, this will be my gift to the nation. But what's really my bunning snag to the nation? But what's really funny is Australia didn't go for this at all. So he tried to lobby them again at Davos with David Cameron. He lobbied this other Aussie politician. And in the briefing notes, this Australian guy spads,

but it is economically similar to payday lending. So David Cameron was outbrained by Skomo. Yeah, essentially. Skomo was just like, look, it is every Australian's dream to be Australian. And the promise of Australia is an Australia for everyone. And I don't think that payday lending is part of that. Yeah.

So effectively what happened is that his whole, his whole raison d'etre at this point, right? Is I need more money coming in because I kind of know, even if I don't acknowledge it, that this is all built in a house of cards. And I know that the British political and media class is like venal grasping and stupid enough to do at least a couple of them, to do everything in their power,

to spend eight years trying to give me as much of the state as possible. And basically we were only saved from the fallout from Greensill being, and it's already going to be bad, by the way, but we're only being saved from the fallout from Greensill being worse by the fact that he needed to use these these venal, incompetent fucking morons to lobby for him. Well, yeah. I mean, I think it's interesting in terms of...

I love British politicians as you can see. Yeah, that's super cool. I love all of them. So I think it's interesting in terms of like a lot of the stuff he ended up doing with the government, so particularly his own thing. He didn't actually make money out of it, but it was more like, I mean, I told you,

it gave him the opportunity to go on Sky News and do the free cup of tea to the nation stick. And I think it was really important in that respect. It gave him this kind of veneer of official dumb about what he's doing. So I think it was like, did Greensill make a lot of money out of the government and all of this stuff? I don't know if he really did.

I think he tried to. He wanted to. His champions were David Cameron, and so they basically failed to let him do that. I think like in terms of like what was really valuable to him was having this like, it made him appear like he was part of the British establishment. Right.

So like reputational law. Yeah. And you know, he got a, I can't remember now if it's an, I think it was an OBE or CBE. Yeah, CBE for services to the economy. Services to the economy. So I think in terms of like, if you're thinking about... Wonderful estate, that man.

Right. Like, okay, so like when SoftBank, when SoftBank invests in Greensill, right, they know that David Cameron has share options. So there's probably some value in that for SoftBank, right? They're like, hmm, could be quite useful to help enrich a former prime minister. Right.

So I think... They picked the wrong one. Well, they picked, they picked perhaps Britain's least capable prime minister. Yeah. You've got to, you've got to pick a smart evil former prime minister like Tony Blair. Yeah.

Blair would have been great for that. Hmm. Well, I mean, I think... Tony Blair, everybody would have read some of the documents and gone, em, guys. Well, I think that's, I think that's a really interesting contrast with Blair, right? With the sort of Blair Inc.

Which developed after his premiership. Yeah. Em, involved in all kinds of interesting locales, shall we say. But it, but like one key feature of it is that it was fucking competent and it was like this amazing machine for like making money and projecting influence around the world.

Like what, I mean, this is David Cameron's legacy now is sort of being involved in this company whose banking subsidiary in Germany is now under criminal investigation. Yeah. And, and like David Cameron is now on, he's like on the front page of the Sunday Times every week for like the past three weeks

with like Green Soul scandal. Like, like this, I mean, it's, it's sort of incredible. Yeah. The contrast between Tony Blair and David Cameron. It's sort of, it's, it's, it's that David Cameron's kind of like, he's got the authority of a cartoon supervillain, but the brain of a carpenter cartoon supervillain's henchman.

So before, before we end, I want to talk, I actually am going to give a little, a little surprise. I'm going to talk about a startup for just a few minutes. Okay. Startup is called pipe. Trying to get the pipe. I know the start up here. So we have to rule myself out of the gets the start up.

Yeah. So pipe says quote, we're building the Nasdaq for revenue. Isn't that the Nasdaq? No, that's not, that's, that depends on how you define a stock, which could be a claim on future revenue, but no, this is much more direct. Alice, we're building the Nasdaq for revenue.

I have no fucking clue about pipe. Pipe will help you unlock your biggest. You can buy shares in other people's supply chain. Yes. Great. You're essentially there. Yeah. Yeah.

If you want shares, you can just buy their supply chain. Essentially, you have to be an accredited investor, but it's a startup and they're trying to basically say, they looked at more or less what green cell was doing and being like, ah, that's, that's an old school way of doing supply chain financing direct to the customer, building that relationship. We need to put this on the platform economy.

We can do this more fucked up. Yeah. So they say pipe transforms recurring revenue into upfront capital for growth without debt or dilution. I love to transform. I see where David Cameron is coming from. Without debt or dilution or debt or dilution? I think dilution.

Oh, okay. There's definitely some dilution. See where David Cameron's coming from because I heard that and my eyes glazed over and I just kind of went like, yeah, cool, whatever. Yeah. I think it's like as a finance guy, like I think there's a lot of finance is just creating

things which are economically exactly the same as debt, but not calling them debt. And I think this is basically what is being described here. This isn't debt. It's more like a thing where you owe a guy some money. No, it's not debt. You're buying a revenue stream. I love David Graber's buying a revenue stream the first

10,000 years. That's right. So they say basically if you make a revenue stream and you want some money, you can sell that revenue stream. And then that revenue stream becomes a tradable instrument on this platform pipe. So what if we took what had happened here in the Green Sill thing and connected and lots and lots of different

buyers and sellers, all of whom could sort of trade these things. A million David Cameron's. Yeah. Let a million David Cameron's. Yeah. Well, so I say this is this is by brain genius, Shemath Palhappitya, who said that pipe is leveling the

playing field for companies and capital markets by taking the underlying contracts that generate recurring revenue streams and making them tradable instruments for the first time. Pipe has therefore unlocked a multi trillion dollar asset class. Revenue. Yes.

Revenue. They have opened a portal to a dimension which cannot be closed. That's right. And can only be a good thing. So if you liked our coverage of Green Sill for the last year or so, get excited because there's more coming. There is always more coming.

So coming down that pipe, just looking at the time here, we've gone very long, but I think we've given the topic this favorite topic of ours. I will be obsessed with it long after this episode. We'll probably hear from our friends at Green Sill again. So I want to say number one, Rob, it's been a long time coming. Thanks for coming in today. It's a pleasure.

I feel like now was about the right time, but there's a lot more to come. It turns out Green Sill, remarkable turnaround story. Bouncing back with like Green Sill. People bounce back. I've bounced back. There are others. Turns out all of those invoices, they were just misplaced.

They weren't falsified. Yeah. You're about to get four or five callbacks from these companies that'll like, oh, I'm wow. You know, this is really embarrassing. Yeah. This is awkward. Yeah.

I went. I had a little bit of a run on an estate in Cheshire. What had happened was Sanjeev Gupta. I thought he said Sanjay Gupta. No. Crazy. All right. But this is this has been a long time coming.

I've been really looking forward to doing this and it has been great to have you here, Rob. Do check out Rob's reporting on all of this. We've cited it extensively in the past and will continue to do so in the future. So do make sure to check that out. It's worth the price of entry to the FT. I also want to thank you for paying the price of entry to this

Patreon and listening to this episode, which to be honest, like bottom line up front, we will almost certainly, in fact, we will be unlocking this before the end of the month. We just wanted to put it out for a Patreon supporters first. Yeah. And also if you're a Patreon supporter, you can get a discount on our new shirts, which are for sale. They won't be for sale much longer at this point.

So get an order in if you want a what if a Swedish man was Italian shirt or a what if the Soviet Union, but an expensive shirt? Yeah, that's right. We keep doing the editions of shirts that instantly sell out and we will never learn. No. Well, then we want to, you know, we want to keep them valuable. Yeah.

We want to keep, we want to create a resale market in TF shirts that can eventually become a trillion-dollar asset class. What if we securitize that? 700 quid on a trashy t-shirt on Depop. Yeah. You have one of the, you have one of the Johannes vonk shirts that has the misprint on it. That's right.

All right. I think that's that's about it for today. So thank you for listening. Don't forget to get a t-shirt soon if you want one. And we'll see you on the free episode in a few days. Bye. Bye. Bye.

Bye.