Lex Greensill handed nine-year UK director ban

Lex Greensill has been banned from acting as a company director in the UK for nine years, bringing a major new legal development in the aftermath of Greensill Capital’s collapse.

The founder of the failed supply chain finance group signed a disqualification undertaking with the UK Insolvency Service, ending legal proceedings that had been due to go to trial in London. The ban begins on 23 June and prevents him from holding boardroom positions in the UK.

The case centred on Greensill’s conduct as a director of companies within the Greensill group before its collapse in 2021. The Insolvency Service said the matter related to receivables finance arrangements involving US construction group Katerra, where notes originated by Greensill Capital were sold to a Credit Suisse fund.

The value of outstanding notes linked to Katerra had reached US$440mn by the time Greensill collapsed. The Insolvency Service said transactions caused or allowed by Greensill breached his duty to exercise reasonable care, skill and diligence as a director.

The development is significant for supply chain finance because Greensill’s collapse remains one of the sector’s most damaging failures. It exposed weaknesses around future receivables, credit insurance dependence, concentration risk and the way supply chain finance assets were packaged for investors.

The ban does not include a finding that Greensill acted dishonestly or in bad faith. A spokesperson for Greensill said the matter had concluded after four years of investigation with no such finding.

For receivables and supply chain finance markets, the case remains a warning about governance, transparency and asset quality. Structures that appear to release working capital efficiently can become highly exposed when underwriting discipline, disclosure and control over underlying receivables weaken.