Up to 3,000 workers in five of Liberty Steel’s plants across England face the possibility of job loss after HM Revenue and Customs filed petitions to liquidate their operating companies over unpaid taxes.

According to a report in UK Newspaper The Guardian, If four Liberty companies fail to reach an agreement with HMRC and other creditors, the GFG Alliance metals empire could be at risk, after a year of struggles following the collapse of its main lender-Greensill Capital.

The four companies under threat are Speciality Steel UK, which employs close to 2,000 people at Rotherham and Stocksbridge in South Yorkshire, Liberty Merchant Bar at Scunthorpe in North Lincolnshire, Liberty Performance Steels Ltd at West Bromwich in the West Midlands, and Liberty Pipes at Hartlepool in County Durham.

The accounting regulator also announced separately on 10 February that it had opened an investigation into the audit of Liberty Commodities Ltd, another part of the GFG company network. The tax authority's decision to file a winding-up petition follows the expiry late last year of a moratorium against such actions by company creditors.

The Guardian released comments from the UK’s main steel unions, Community, GMB and Unite, who issued a joint statement criticizing HMRC’s actions, arguing that they risked pushing the plants under.

“This action by HMRC threatens thousands of jobs and is a devastating blow to our members and their families. Liberty Steel is a strategically important business, crucial to delivering net zero, and under no circumstances can our plants be allowed to close.”

Community, GMB and Unite; UK steel unions

The unions said: “This action by HMRC threatens thousands of jobs and is a devastating blow to our members and their families. Liberty Steel is a strategically important business, crucial to delivering net zero, and under no circumstances can our plants be allowed to close.”

“We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.”

HMRC spokesperson

Companies or other creditors can apply to the high court to wind up a company if it cannot pay its debt. If a winding up petition is successful the business’s assets can be sold and the proceeds paid to creditors.

The petitions and investigation are only adding to pre-existing business struggles facing Sanjeev Gupta, CEO and chairman of Liberty Steel. Gupta is currently in negotiations to replace the money borrowed from Greensill, which had bankrolled the expansion of his empire.

HMRC has yet to comment on the criticisms. According to a company spokesperson: “We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.”

Source: The Guardian