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Swinging for the fences.
Swinging for the fences.
(Bloomberg) -- Industrial materials from copper to iron ore are feeling the pain as China steps up efforts to cool a blistering rally in commodities that’s fanning fears over a global surge in inflation.Iron ore futures plunged as much as 11% in Singapore and steel rebar slid as Chinese officials rolled out fresh measures for steelmakers to take the steam out of markets. Base metals have also come under pressure in recent days, with copper down 4.7% from a record high set on Monday.The measures targeting China’s steel sector come after surging raw-material costs sparked the biggest jump in Chinese factory-gate prices in more than three years in April. A sharp jump in U.S. consumer prices has also sparked worries across financial markets that rising inflation will hamper a global recovery and force the Federal Reserve to tighten policy sooner than thought.“Many fear that high inflation will force the Fed to take away the punch bowl,” which acted as one of the forces in propelling a rally in commodities from their nadir in March last year, TD Securities analysts led by Bart Melek said in a note. “Ongoing deleveraging in China should take some wind out of the sails for commodity demand.”Copper and iron ore have been among the biggest gainers in a yearlong rally in commodities as Covid-19 upended supply while stimulus measures supported economies and sparked a surge in demand, particularly in China. An accelerating global decarbonization drive has also transformed the long-term outlook for metals like copper.But signs of easing short-term supplies and softening demand may be emerging in physical markets. LME metal has flipped into contango, a market structure in which spot prices trade below those three months out. That indicates loose supply or falling demand in the near term. Right now, it’s gapped out to the weakest since early January.“Copper will still trade at a very good price, but I do think it will come under pressure,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone from London. “There are some headwinds coming.”Still, U.S. retail sales stalled in April following a sharp advance in the prior month when pandemic-relief checks provided millions of Americans with increased spending power. This could help the narrative by Fed officials this week that inflation numbers this week were an aberration and were transitory.Copper fell 1% to settle at $10,240.50 a ton at 5:53 p.m. on the London Metal Exchange, after peaking Monday at $10,747.50. Other base metals fared better on Friday, though aluminum still had a 3% weekly drop.In ferrous markets, iron ore fell 4.3% in Singapore on Friday, while futures in Dalian dropped the daily limit. Iron ore had surged to record highs recently amid the broad commodities boom.Prices slumped as Tangshan’s local government vowed to punish violations including price manipulation, and steelmakers were told that they may be suspended from doing business or have their licenses revoked if they break the law. The city, which accounts for 14% of China’s steel output, has been at the center of an industry overhaul as authorities unveiled a slew of output restrictions to control emissions.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Market optimism continued to be a key driver in a choppy week for the global financial markets. A marked acceleration in U.S inflation was the key stat of the week.
(Bloomberg) -- Billionaire George Soros’s investment firm snapped up shares of ViacomCBS, Discovery and Baidu as they were being sold off in massive blocks during the collapse of Bill Hwang’s Archegos Capital Management.Soros Fund Management bought $194 million of ViacomCBS Inc., Baidu Inc. stock valued at $77 million, as well $46 million of Vipshop Holdings Ltd. and $34 million of Tencent Music Entertainment Group during the first quarter, according to a regulatory filing released Friday. A person familiar with the fund’s trading said the company didn’t hold the shares prior to Archegos’s implosion.Archegos, the family office of former hedge fund manager Hwang, fell apart during the last week of March after amassing large leveraged positions in a concentrated portfolio of U.S. and Chinese companies. At its peak, the family office had more than $20 billion of capital and total bets exceeding $100 billion.Hwang was wiped out in just days after investments including ViacomCBS and Discovery tumbled, triggering margin calls from global banks, who then sold the stocks in the big block trades. The fiasco is expected to cost the finance industry about $10 billion, has prompted an investigation by the U.S. Securities and Exchange Commission and caused heads to roll at Credit Suisse Group AG, where the hit exceeds $5 billion.The 13F filing provides one of the first examples of how a hedge fund attempted to capitalize on the distressed remains of Archegos. It also offers an insight into Soros’s investment firm, which is run by Chief Investment Officer Dawn Fitzpatrick.She told Bloomberg in March that she was willing to jump on dislocations in the market, investing $4 billion during the pandemic-induced swoon a year ago, including buying residential mortgages on the cheap. Soros returned almost 30% in the 12 months through February and manages $27 billion across a range of strategies.“When there’s a dislocation, we’re prepared to not just double down but triple down when the facts and circumstances support that,” Fitzpatrick, 51, said in a “Front Row” interview on Bloomberg TV.Soros also increased its bet on Amazon.com Inc. and homebuilder DR Horton Inc., which is now its second-largest public equity position.The 13F, which money managers overseeing more than $100 million in U.S. equities must file quarterly, revealed that Soros held $4.5 billion of U.S. equities, down $77 million from the prior quarter.The biggest exit in the quarter was Palantir Technologies Inc. Soros sold 18.5 million shares valued at about $435 million. The firm originally revealed it owned a stake in the controversial data-mining company controlled by Peter Thiel in November, but rapidly issued a statement saying the original investment was made in 2012 and it regretted the decision.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Not all industry participants are amused by dogecoin’s tricks.
(Bloomberg) -- The chief executive officer of a $1.7 billion Canadian private lender closed his personal bank account just days after he was questioned by investigators about receiving undisclosed payments from a client, court documents say.David Sharpe, the former CEO of Bridging Finance Inc., closed a personal checking account at the Bank of Montreal four business days after the Ontario Securities Commission questioned him about his relationship with Sean McCoshen, a Canadian entrepreneur who has proposed an Alberta-to-Alaska railway.McCoshen’s companies borrowed more than C$100 million ($82.6 million) from Bridging-managed funds. During the same period, a separate numbered company controlled by McCoshen transferred C$19.5 million into Sharpe’s personal account, the OSC has alleged. The payments took place between July 2016 and June 2019.In fact, six payments worth C$17.2 million were transferred to Sharpe within five business days of Bridging advancing funds to the railway project and other McCoshen-connected firms, according to a new document filed by the securities commission in an Ontario court.Those transactions and others are at the heart of the case, which has seen a court appoint PricewaterhouseCoopers take control of the Toronto-based firm, a private lender to small- and medium-size companies. The OSC is probing Bridging and former senior executives for allegedly mismanaging funds and failing to disclose conflicts of interest, and has claimed in court documents that Sharpe tried to mislead its investigators.Through a spokesperson, Sharpe declined to comment. McCoshen couldn’t be immediately reached for comment.Sharpe was questioned by the securities commission on Oct. 27, 2020 about his relationship with McCoshen. He closed the Bank of Montreal account on Nov. 2. In February, McCoshen dissolved the numbered company that made the transfers, the court documents say.Sharpe and his wife, Natasha Sharpe, co-founded and ran the firm together. They were fired last week by PricewaterhouseCoopers.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
China’s EV makers are not only set to grow big in their domestic market, but also have great plans to expand in Western Markets and commodity demand in these overseas markets could see huge demand for metals as a result
The gold markets have shown themselves to be resilient after initially pulling back during the day. In fact, we find ourselves testing a significant downtrend line that could open up a huge move higher.
Why wait for the government to give you cash when you can do it yourself?
Lawmakers are looking for quick action to improve an existing forgiveness program.
The hot crypto market "actually does resemble a casino" to investors, Gundlach told Yahoo Finance.
(Bloomberg) -- Bond markets are famous for pushing their agenda, and in east Europe right now, they’re pushing for rate increases, never mind what central banks have to say on the matter.Yields on bonds of Hungary and Poland are rising faster than anywhere else in Europe. Hungary’s jumped 32 basis points last week, signaling traders are primed for rate liftoff as inflation roars back to life ahead of widespread economic re-openings this summer.Like peers in Frankfurt, central bankers in Hungary and Poland have signaled they’re in no rush to curb inflation that may turn out to be temporary, preferring to wait and foster still-fragile economic recoveries from the pandemic.Traders are less patient. In Hungary, market-implied pricing shows expectations for 130 basis points of rate hikes in two years, according to Bloomberg data.“The central bank is walking a tightrope here,” said ING economist Peter Virovacz. “If it manages to communicate in a credible way that it believes CPI would return to its 2%-4% tolerance band next year, it can wait out the spike and avoid a hawkish cycle.”The situation brings to mind the quip by political adviser James Carville that when he dies he wanted to come back as the bond market because “you can intimidate everybody.”Carville was talking about traders who pushed up yields in protest against a ballooning budget deficit in the mid-1990s, but there are parallels with the Hungarian and Polish bond selloff on concerns that an economic boom will create an inflation spiral.These latter-day vigilantes may be gaining the upper hand, with strategists at JPMorgan Chase & Co. reiterating their advice to stay underweight bonds in central and Eastern Europe.A premature end of purchase programs is a big risk for Poland, where the central bank has bought the equivalent of 48% of issuance and in Hungary where it accounts for almost a third of purchases, according to JPMorgan.QE ConundrumIf Polish policy makers bring forward their timetable for raising rates, the central bank would also have to wind down its quantitative-easing program, potentially removing the current backstop for the market.One Polish policy maker, Eugeniusz Gatnar, recently called for a rate increase in June. Yet his voice remains in the minority on the 10-person panel. Polish central bank Governor Adam Glapinski has said that rates will stay at their record low until the end of the current policymakers’ term, which ends in early 2022.Still, the inflation threat may be real: in Hungary the pace of annual consumer prices recently accelerated to 5.1%. In Poland it’s running at 4.3%. Both blew past the upper limit of the central banks’ tolerance range, and compare with an inflation reading of 4.2% in the U.S. that sent markets into a tailspin last week.“With inflation surprising to the upside and growth on the mend, we think the market narrative will increasingly focus on the sustainability of QE in CEE,” according to JPMorgan emerging market strategists including Saad Siddiqui.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A metal coatings plant in China's manufacturing hub has been hit by price increases of up to 30% for raw materials including steel, aluminium, thinner and paint since the Chinese New Year in February. The firm has had no choice but to pass most of these higher costs on to its clients, including those in the United States, said King Lau, who helps run Dongguan-based Kam Pin Industrial Ltd, in Guangdong province. "Our customers understand, because it is happening to many different kinds of industries including home appliances, mobile phones, vehicles," Lau said, referring to price hikes by Chinese exporters.
(Bloomberg) -- Britain’s restaurants and bars can serve indoors again for the first time in five months on Monday. Many of them are struggling to find enough staff after Brexit and three lockdowns in a year drove workers out of the industry.Chefs, waiters and bartenders needed for everything from fast-food restaurants to fine dining are in short supply, with industry executives and recruiters saying that many of their most experienced people have left for other jobs.“The people just aren’t there anymore,” said David Moore, owner of Pied à Terre, London’s longest-standing independent Michelin-starred restaurant. The industry is facing a “fairly massive, very serious skills shortage.”It’s a sign of scars on the U.K. economy that may hold back a rebound from the worst recession in three centuries — or a spark for inflation that’s already starting to concern investors. It’s a trend that already hit the U.S., prompting McDonald’s Corp. and Chipolte Mexican Grill Inc. to raise wages for staff.In Britain, hospitality companies were among the hardest hit by rules that closed leisure venues and pushed workers onto the government’s furlough wage subsidy program.Despite that lifeline, the industry shed 330,000 staff through the pandemic, said Kate Nicholls, chief executive officer of the lobby group UKHospitality. About 20% of all restaurants and 10% of hotels closed shut for good, and many workers are looking at the long hours, low pay and shaky prospects of hospitality and looking elsewhere for work.“People people are still nervous about committing to hospitality, fearful that the government may still impose restrictions, businesses unable to offer full-time posts,” Nicholls said. “The single biggest driver is uncertainty.”Pub and restaurant stocks have rallied hard this year, with Restaurant Group more than doubling to the top performance of the FTSE 350 Index. But despite the U.K.’s speedy vaccination rollout, most hospitality companies are still trading below pre-Covid levels and hope to get a lift from the return of consumers ready to spend their savings.Staffing is one of the industry’s biggest uncertainties. Online job advertisements for “catering and hospitality” rose above pre-pandemic levels in the first week of May, the jobs search engine Adzuna said. A survey of 1,000 companies published Monday by the CIPD, a group representing human resources workers, showed two thirds of hospitality companies plan to recruit in the second quarter, up from 36% in the first.Pizza Express in April set out plans to recruit more than 1,000 new roles, reversing cuts made over the past year. D&D, with more than 40 high-end restaurants based primarily in London, is seeking to fill 400 jobs but so far managed to recruit just half that number.“We’re having people working much longer hours to be able to run the restaurants,” D&D CEO Des Gunewardena said. “We’re going to be fine, but it is a challenge.”Thomas Faulkner, a former chef who now recruits for the trade, sees a “critical shortage” of staff likely to linger for some time unless restaurants deliver more incentives.High turnover due to tough working conditions, high pressure, low pay and a “culture of machismo” meant that London was losing skilled chefs faster than they could be trained even before Covid struck, according to a report published by the Centre for London.“Being a chef is generally not healthy,” said Faulkner.“What’s happened in this pandemic is they have gone to do other roles, realizing they can earn the same or more money standing in a car park or delivering for Amazon or Ocado. It’s a much more pleasant experience. They do fewer hours. They do sociable hours,” he said. Britain’s exit from the European Union, which was completed in January, dried up a big pool of labor. More than 50,000 migrants left the U.K. in the second quarter of 2020, according to government estimates, with many more expected to have followed over the rest of the year. Immigration rules makes it difficult for them to return.Before Brexit, up to a quarter of the hospitality workforce nationwide and 38% in London was made up by EU nationals, according to KPMG.Gunewardena said the D&D is doing more to train staff, both internally and through government programs. In the short-term, its upmarket restaurants have “been a bit more liberal” with whom they take on board, offering higher pay than what was on offer before and training people to work in fine dining, he said.“We’re hearing elsewhere within the sector of other restaurants throwing money at people,” Gunewardenza said. “We’re paying the same but bringing people up.”Some big changes are inevitable in the sector including many moving from other industries, he said. “Longer term, it will be a higher skilled, higher wage sector.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Sanjeev Gupta’s plans to save his embattled industrial empire suffered a major setback as the U.K. opened a fraud investigation, prompting a potential financial partner to walk away.For two months, Gupta has been scrambling to refinance after the collapse of his group’s main lender, Greensill Capital, and recently looked close to winning a reprieve -- helped along by a surging commodity prices.But on Friday, the Serious Fraud Office announced a probe into Gupta’s GFG Alliance, including into the financing arrangements with Greensill. That prompted White Oak Global Advisors LLC -- which had recently offered a lifeline with terms for a 200 million-pound ($282 million) loan for Gupta’s U.K. steel business -- to walk away. White Oak was also behind funding for part of Gupta’s Australian assets, the Australian Financial Review has said.“As with any regulated financial institution, we are not in a position to continue discussions with any company that is under investigation by the Serious Fraud Office for money laundering,” White Oak said in a statement.GFG said Friday it will co-operate fully with the SFO investigation. It declined to comment on White Oak’s decision.The fraud probe also puts other efforts to replace about $5 billion Gupta had borrowed from Greensill in question.On Thursday, Gupta had conveyed a much brighter outlook, expressing confidence of a “new future” for his sprawling group of companies. On a podcast for employees, he said it had been “relatively easy to get refinancing” for the Whyalla mill in Australia. He also said that GFG had been “inundated by offers to help and to finance,” partly due to strong commodity markets.The picture is now bleaker in the wake of the SFO investigation, which follows months of scrutiny from lawmakers and the media over Gupta and Greensill’s financing practices. GFG has come under the microscope after the collapse of Greensill in March revealed it had been a recipient of financing based on expected future invoices, for sales that were merely predicted.Trading ActivitiesThe exact scope of the SFO investigation isn’t yet clear. Bloomberg has reported four banks stopped working with Gupta’s Liberty House Group trading business, starting in 2016, amid concerns about what they perceived to be problems in paperwork provided by Liberty, Bloomberg News has reported. In one example, the company had presented a bank with what seemed to be duplicate shipping receipts. A spokesman for Gupta has denied any wrongdoing.The two-month period it took from starting to covertly look into GFG and its financing by Greensill to announcing a formal probe is a quick turn-around for the SFO, which often takes years to publicly confirm it’s taking action against a company.It will now start to gather evidence, including securing devices and documents. However, it’ll likely take years for the office to make any tangible updates to the investigation, including whether it decides to charge individuals as part of the probe.The funding from Lex Greensill’s eponymous firm helped GFG expand at an astonishing rate in the past five years by targeting old, unwanted assets. His loose collection of companies now employs some 35,000 people worldwide, with steel and aluminum plants in the U.S., U.K., France, Romania and Australia.Staying afloat would enable Gupta to enjoy some of the best times his industrial businesses have seen. Steel prices are near an all-time high as demand recovers from the coronavirus pandemic and China cuts capacity to curb pollution. Aluminum, Gupta’s other major business, hit a three-year high this week amid a broad commodities boom.Still, Greensill’s collapse has already taken a major toll on Gupta’s businesses. On Thursday, his Wyelands Bank said it would be wound up if it can’t find a buyer. His steel units in France and Belgium have started creditor protection procedures, he’s approached buyers for some of his engineering assets, people familiar with the matter have said, and also sought buyers for two steel plants in France.For governments too, there is much at stake. Countries that once feted him as a savior for buying decrepit assets may have to pick up the pieces, due to the jobs at risk and some assets’ strategic importance to industry.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Earlier, the three major indexes rebounded after declining sharply earlier this week.
The direction of the June Comex gold market on Friday is likely to be determined by trader reaction to $1827.40.
(Bloomberg) -- There’s an unwritten rule in global bond markets: never short Germany.But when Europe’s safest asset is in the midst of a retreat that threatens to push yields on bunds above 0% for the first time in more than two years, a paradigm shift may be underway.Toronto-Dominion Bank was forced to close its recommendation for investors to buy German bonds last week, after yields climbed above their stop-loss level. NatWest Markets are calling for investors to sell bunds, hailing the end of the “supercycle” that has seen the securities rally for the best part of two decades. Goldman Sachs Group Inc. and ING Groep NV are among banks who see yields rising to 0% by the end of the year.“The accelerating selloff in Germany is probably the defining feature of the market right now,” said Richard McGuire, head of rates strategy at Rabobank International.As the vaccine rollout gathers pace across the region, bets are on for a remarkable economic comeback -- and an accompanying spike in inflation. That, and the prospect of reduced bond buying by the European central bank, has eroded the haven appeal of bunds, while simultaneously threatening to sap appetite for high-yielding notes of debt-loaded nations like Italy.“The two cannot coexist happily with each other,” McGuire said. “There is a tension between bund yields rising as the market prices out ECB support and, at the same time, it putting upward pressure on peripheral borrowing costs.”Long-term investors have had to pay up for the privilege of holding German debt, which is seen as some of the safest that money can buy -- a reflection of its scarcity and the ECB’s extraordinary package of stimulus measures. That process was turbo-charged by the pandemic, pushing 10-year yields down to within touching distance of minus 1% last year.But expectations are growing that the ECB could start tapering its pandemic program this summer, potentially removing a key pillar of support, even as borrowing needs remain high. While quantitative easing helped cover the growing deficits of Italy and Spain during the pandemic so far, that might not be the case this year, HSBC Holdings Plc said.There’s also a political dimension to the rising yields.The growing strength of Germany’s Green party is feeding through into bets elections later this year could trigger a break with the nation’s traditional fiscal caution. Germany has historically maintained a so-called debt brake over the years, keeping the budget balanced and bond issuance limited.The 30-year swap spread -- which is sensitive to expectations of bond supply -- narrowed last week by the most in more than a year as investors prepare for increased spending and less monetary support.“It’s a quiet revolution,” wrote Giles Gale, head of European rates strategy at NatWest. Although the ECB “are buying at a stonking pace, they aren’t soaking up all the gross supply.”Reflation FrenzyWhile U.S. Treasuries have been caught in the reflation frenzy since the start of February, the fact that yields are catching up in Germany -- a bastion of tepid price increases -- is sending ripples across markets.The world’s stock of negative-yielding investment grade debt -- of which Europe made up the bulk -- has fallen to around 12 trillion dollars, the lowest level since June last year. As a share of outstanding debt, it’s now below 20%, compared with more than 30% at its peak in 2019.In equities, investors are rotating out of more expensive growth stocks and into cheaper value securities, according to Kasper Elmgreen, head of equities at Amundi SA.And European corporate bonds are feeling the effects too. The latest jump in yields has pushed about 80% of high-grade notes sold this year below their issue price, based on data compiled by Bloomberg. That’s up from earlier this month when the share of post-issuance losers stood at just under 50%.Traders have accumulated the largest short position in junk bonds since 2008 and high-grade short-selling has risen to its highest level since early 2014.The pickup in reflation bets in markets matches the outlook among economists surveyed by Bloomberg. The latest data show them raising their forecasts for consumer-price growth in the euro to 2.3% in the fourth quarter from 2.2% previously, and clearly above the ECB’s medium-term target of just under 2%.Positive bund yields would also have a psychological impact.In BofA Global Research’s latest European credit investor survey, 15% of respondents said the rally in corporate bonds will be done when 10-year German yields turn positive, making it the second most-cited bearish trigger after central bank tapering.“Everyone is at peak inflation panic,” said Charles Diebel, a money manager at Mediolanum SpA. “It’s psychologically important.”This Week:German, French and Spanish bond auctions totaling about 29 billion euros. The U.K. Will sell 3-, 15- and 20-year giltsPreliminary manufacturing and services PMIs for May in euro-area, Germany, France and U.K. will be in focus on FridayECB President Christine Lagarde speaks twice, as does chief economist Philip LaneFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Meme-stock favorite AMC has skyrocketed this year, but one veteran media analyst says the movie studios' pressure on the exclusivity window means AMC is very overpriced.
(Bloomberg) -- Cryptocurrency-exposed stocks are recovering from a bloody four-day slide that had wiped out roughly $6.1 billion in value from a basket of companies tied to the fortunes of the volatile digital-asset world.Marathon Digital Holdings Inc.’s 17% jump led the way on Friday, as the shares halted a nine day losing streak. The gains come as Bitcoin climbs back from a slide of more than 15% on Thursday. Tesla Inc. Chief Executive Officer Elon Musk triggered the volatility late Wednesday by souring on the token’s energy demands. Microstrategy Inc. rose 6.8% on Friday, while Mike Novogratz’s Galaxy Digital Holdings jumped 16% for the best day in a month.The turnaround for companies that have ridden Bitcoin’s coattails came as more retail investors gravitated toward even greater speculative plays like Dogecoin. Bitcoin rose 2% to $50,275 at 4:01 p.m. in New York, while a Bloomberg gauge of cryptocurrencies rallied 8.3% after the worst two-day slide since late February.Riot Blockchain Inc. jumped 17% for its largest gain in more than two months while Argo Blockchain Plc and On-Line Blockchain Plc stormed back in European trading. Coinbase Global Inc. was an outlier. The largest U.S. crypto exchange slumped 2.5% as strong quarterly income failed to excite traders.While crypto bulls cheered Friday’s bounce, Jack Dorsey’s Square Inc. poured some cold water on the excitement. The company is not planning to buy more Bitcoin for its corporate treasuries after losing $20 million on a $220 million investment in the last quarter, according to a Financial News report.Elon Musk’s stunning tweet late Wednesday triggered the free-fall for Bitcoin as the billionaire brought concerns surrounding the energy usage of the mining required for the currency to light and forced Wall Street to grapple with an uncertain outlook. Worries deepened after a Thursday Bloomberg News report that Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service.(Updates share movement throughout, adds detail on Square report in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Sanjeev Gupta’s plans to save his sprawling metals empire were mired in confusion on Saturday as a key financial backer sent mixed messages about its support in the wake of a U.K. fraud probe.On Friday, the Serious Fraud Office launched an investigation into possible fraud and money laundering at Gupta’s GFG Alliance That initially prompted White Oak Global Advisors LLC -- which had recently offered loans to his U.K. steel businesses and one of his Australian units -- to say it wasn’t in a position to continue discussions with a company facing a probe.Hours later, a spokesperson for the San Francisco-based lender said it was continuing efforts to refinance Liberty Primary Metals of Australia, “subject to financial due diligence and acceptable governance.” Last week it had agreed terms with Gupta to refinance the unit.The apparent reversal throws the fate of Gupta’s businesses into further confusion. It’s unclear whether the loan to the Australian unit, which includes the Whyalla steelworks, will still go ahead as planned or depends on the SFO investigation.White Oak declined to comment Saturday on the status of a reported 200 million pounds ($282 million) of lending to Gupta’s U.K. businesses, The company also wouldn’t comment on a report in the Financial Times saying White Oak may be reluctant to walk away because it has a financial exposure to Gupta’s businesses after buying up debt from the steel tycoon.GFG said Friday it will co-operate fully with the SFO investigation. It declined to comment on White Oak’s decision.Gupta has been scrambling to find new financing after Greensill, his biggest lender, fell into insolvency. His group employs 35,000 people across 30 countries, all which may be in danger of losing their jobs if the tycoon can’t secure replacement loans. He faces an uphill battle, with the SFO probe likely to deter many potential financiers.The exact scope of the SFO investigation isn’t yet clear. Four banks stopped working with Gupta’s Liberty House Group trading business, starting in 2016, amid concerns about what they perceived to be problems in paperwork provided by Liberty, Bloomberg News has reported. In one example, the company had presented a bank with what seemed to be duplicate shipping receipts. A spokesman for Gupta has denied any wrongdoing.The two-month period from when it started looking into GFG and its financing by Greensill to announcing the formal probe is a quick turn-around for the SFO, which often takes years to publicly confirm it’s taking action against a company.It will now start to gather evidence, including securing devices and documents. However, it’ll likely take years for the office to make any tangible updates to the investigation, including whether it decides to charge individuals as part of the probe.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.