Greensill and Gupta’s Intertwined Empires Had for Years Raised Concerns Internally

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The business empires of metals magnate Sanjeev Gupta and financier Lex Greensill leaned on each other to fuel their growth. But for years executives and advisers close to both entrepreneurs urged the two men to decouple their businesses, according to people familiar with the matter.

They failed to do so. Now Mr. Greensill’s firm, Greensill Capital, is insolvent, and Mr. Gupta’s conglomerate, GFG Alliance, is scrambling to survive.

Greensill’s implosion has ensnared a raft of financial firms including Credit Suisse Group AG, which froze $10 billion of funds it manages with the firm. Regulators have taken over supervision of Greensill’s German bank after they said a special audit found suspicious accounting related to Mr. Gupta. The move came despite a last-ditch attempt by SoftBank Group Corp. , Greensill’s largest external investor, to intervene directly with the regulator.

For GFG Alliance, which houses the Gupta family’s steel, aluminum and energy businesses and generates annual revenue of $20 billion, its main source of funding suddenly dried up.

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