Recommendation 21

In the Letter of Concern, the Bank outlined what it considered to be breaches of the guarantee agreement. In the Letter, the Bank also suspended the guarantee while the investigation was ongoing and invited representations from Greensill.59 We asked the Bank why it had taken so long between initiating the investigation in October 2020 and issuing the first Letter of Concern in March 2021. In response, the Bank said that it was a “very complex situation” and that it wanted to ensure it “followed the process properly” before putting forward its concerns formally. The Bank acknowledged that it was possible it could have issued the Letter of Concern sooner, but it thought this was “probably unadvisable”.60 The Bank and the Department told us that they felt there was “no real 53 C&AG’s Report, paras 13, 3.4, figure 8 54 C&AG’s Report, paras 3.5, 3.9 55 Qq 75, 77–78, 90, 133, 136 56 Q 47 57 C&AG’s Report, para 3.9 58 Q 49 59 C&AG’s Report, para 3.10 60 Qq 46–47 Lessons from Greensill Capital: accreditation to business support schemes 17 benefit from rushing the process” as they wanted to be sure the decision to suspend the guarantee would not be challenged.61 Greensill’s administrators have indicated that their view is that the loans were compliant with the scheme rules, including those relating to group lending, and any decision to revoke the guarantee would constitute a breach of the guarantee agreement and Greensill would reserve the right to seek damages.62