The Public Accounts Committee of deputies found that the bank, which oversaw the billions lent to businesses during the pandemic in the form of government guaranteed loans, had failed to demonstrate sufficient due diligence.
Politicians also questioned why the bank was “insufficiently curious” about reports suggesting Greensill was on the verge of collapse and said the lender’s controls were “woefully inadequate”.
The scandal surrounding Greensill has spread throughout Westminster with allegations the lender has received preferential treatment.
It emerged that former Prime Minister David Cameron used his position as an adviser to make dozens of appeals to Chancellor Rishi Sunak and Treasury officials for loans during the pandemic before the Greensill collapse, which resulted in led to several surveys.
The committee considered the role of British Investment Bank and said: “Up to £ 335million in taxpayers’ money is at increased risk as a result of the British Business Bank’s failure to do due diligence in Greensill Capital … when it asked to become a lender under the bank’s business support programs. “
MPs said there was a “lack of information sharing within government” that hampered decision-making in response to the pandemic, allowing Greensill to access taxpayer-funded programs.
They also suggested that Greensill may have broken lending rules under the Coronavirus Business Interruption Loan Scheme (CBILS) by loaning £ 350million to the Gupta Family Group (GFG) Alliance.
It was revealed that seven loans of £ 50million each had been made to different GFG entities while the rules said companies should only be entitled to a maximum of £ 50million per organization.
The scathing report said the government’s failure to effectively share information about companies that have approached it for help, including Greensill, put “taxpayer dollars at risk.”
He also said the government and the British Business Bank struck the wrong balance between making quick decisions and protecting the interests of taxpayers when launching the various loan programs.
During the pandemic, the Treasury launched several loan programs, guaranteeing billions and promising to repay between 80% and 100% of all loans that were not repaid.
This meant fewer checks were made on companies taking out the loans to speed up the process when the pandemic and lockdowns first erupted.
The committee said the bank must define “how it will better balance speed of delivery and value for money in the future and what compromises it is prepared to accept.”
But the most scathing criticism was of the bank’s oversight of Greensill, which MPs called “woefully inadequate,” warning bosses were relying too much on the work of others to accredit Greensill.
He added: “The bank has not been curious enough to identify where the money loaned through the programs, including Greensill, ultimately went.”
The British Business Bank said: “The National Audit Office concluded in July 2021 that the British Business Bank was appropriately applying a streamlined version of its established process when it accredited Greensill Capital (UK) Limited as a lender under the Covid-19 business support programs.
“Between March 2020 and March 2021, the British Business Bank accredited 116 CBILS lenders, 27 CLBILS (Coronavirus Large Business Interruption Loan Scheme) and 28 BBLS (Bounce Bank Loan Scheme) to provide essential access to financing to more than 1.6 million businesses. .
“A less streamlined accreditation process would have meant fewer lenders would have been accredited and fewer businesses would have received the essential emergency funding they needed during the pandemic.
“The NAO also found that it was a credit to the bank that its post-accreditation monitoring and audit processes quickly detected a potential problem, as they were designed to do.
“The bank’s investigation into potential Greensill Capital violations of the program rules for CLBILS is ongoing.”
A government spokesperson said: “The government was not involved in the decision to certify Greensill. The decision was taken independently by the British Business Bank, in accordance with their usual procedures.