I first met Lex on a windy day in September 2019. By then, he was a billionaire and I was an annoying journalist who kept writing stories that pointed out odd conflicts of interest and other problems with Greensill Capital. He told some of the senior executives at Greensill that he hated me because I had it in for him. In truth, I just thought there was something interesting going on at Greensill. Greensill seemed like a company that was either going to be massive one day, or was going to blow up.
Almost every time I asked James Doran or Credit Suisse or anyone to do with Greensill a tough question, the answer either didn’t make sense, contradicted an earlier answer, or was provably false. And so I kept on asking.
That first meeting was arranged by Lex’s external ‘flak’ – what journalists call PR advisers, because they are hit with all the missiles thrown by reporters. The flak had thought it would be a good idea for us to have a one-to-one connection. Maybe, in person, Lex would see that I didn’t have a vendetta. And maybe, in person, I would get a better understanding of the magic that had bewitched so many more important people. I had certainly been trying to talk to Lex for months, so I agreed immediately.
Greensill’s office is on the Strand, more or less opposite the Savoy hotel. It’s a quintessentially London location for a business headquarters. At least, it would be if you had missed the past four or five decades. Most financial firms are in the City or Canary Wharf. Mayfair – with all its Michelin stars and cool bars – is the premium choice for hedge funds. The hottest new tech start-ups are in converted warehouses or co-working spaces in Shoreditch, surrounded by hipster coffee shops. Greensill, which aspires to be something like all these types of businesses, is located in one of the most touristy, most uncool parts of central London.
I was very keen to see inside the infamous Greensill office. I had heard it looked like a cross between a stuffy London gentlemen’s club and a medieval theme park, with dark wood, leather chairs, Old Masters in baroque gold-leaf frames, and even a suit of armour on display. But I was to be disappointed. By the time I got there, Lex had completely refurbished. It was a bland corporate office with off-white walls and conventional furnishing. It was exceptionally quiet. The only decor of note was a framed copy of Lex’s CBE certificate. Later, I heard that Lex had caught wind of people mocking the office’s former look and ordered a change. He’d also decided that Greensill’s branding should be fintech, not investment bank, so the medieval armour had to go.
My meeting got off to a bad start. The bombastic former journalist James Doran changed the rules of engagement at the last minute. The meeting had been billed as ‘on the record’, meaning I could publish everything Lex said, but Doran decided he wanted to make it completely off the record. It was a lame stunt. I was already in the room and Doran knew that it would be hard for me to walk away.
I’d had several run-ins with Greensill and Doran already. The whole ‘Hodor’ incident – when Doran had held back my story until after the Vision Fund had committed to Greensill – was still fresh in my mind. Another time, Doran, myself and a colleague of mine who had known him for years met for a coffee in Pret a Manger on Borough High Street. Doran had been visiting our office with Lex, who had been interviewed by Sky TV’s Ian King, whose studio was in the same building as our office. I spotted Doran on the way out of the office and persuaded him to come for a coffee with us. It started out amicably enough – some small talk, a few questions about the TV interview. But when I asked him slightly more probing questions about the SoftBank investment, Doran started yelling at the top of his voice in the busy fast-food restaurant, accusing me of being unprofessional and threatening that I had to stop challenging the company if I didn’t want to ruin my career. I looked at my colleague, who seemed to be in a state of bemused shock. I asked Doran if he still wanted the coffee. It was a surreal moment when I didn’t know whether to laugh or leave. In the end, we sat down for an awkward thirty-minute chat.
At the meeting at Greensill’s office on the Strand, we negotiated a truce of sorts. We could talk on background but determine later what was on the record. In the end, I sent a transcript back to Doran and told him I considered it was all on the record – I figured he was too lazy to go through it in fine detail at that stage. That turned out to be a good assumption, as he agreed to my terms, and I ended up with two hours of Lex on Lex.
The Australian financier began with the same story I’d heard many times about growing up on the farm. There were a few details other journalists hadn’t reported, but it was the traditional backstory.
He talked about OzEom. ‘I went and worked in a start-up company that tried to do what we now call supply chain finance [SCF] and that company went bust. I was just an employee. I did actually put A$250,000 of my own money in, and I lost it all, which I have to say was really quite painful. But also that pain meant that I was like a dog with a bone and I didn’t want to let it slip.’
He was friendly enough, and talked in a measured manner, frequently repeating my name. ‘What you have to understand, Duncan . . . you see, Duncan . . . And then, Duncan . . .’ It came across like a crass attempt to appear charming. It seemed to me more like someone trying too hard to impose their control over the conversation. My sources who knew Lex described him in almost equal measure as impressive and charismatic, or false and superficial. Some of them say he’s a pathological liar. I definitely didn’t find him charismatic.
He also used a strange kind of pseudo-banker-speak, mixed with the kind of phrases an executive at a hip technology firm might use. It felt learned, studied, as if he was trying too hard. For instance, when he talked about his early banking career, he said, ‘I thought Morgan Stanley was a way cooler brand than Rothschild, so I picked Morgan Stanley’s bid.’ Citigroup, he said, were ‘the big gorillas in the space.’
He also backtracked entirely on points that had come up in my earlier reporting. For instance, when funding dried up for the SCF programme, he now said, ‘Fortunately, and you raised it in one of your articles, Morgan Stanley’s bank in Utah, and this was perfectly within their authorizations to do, said, “We’ve got this, we’ll do this, we’ve been looking for things that are compliant with the bank rules to be able to buy”, and so they funded the programme but, at the same time, they basically said, “Guys you need to find a better way to finance your business.” ’
When I’d tried to publish that a few months earlier, Greensill had said it wasn’t true, as had Morgan Stanley.
Despite the quirks, and the backflips, he did seem refreshingly honest about the early years of Greensill Capital. The plan after leaving Citi, he said, was to try a version of OzEcom back in Australia, focused on farmers, and expand from there. It was tough going.
‘We didn’t have big backers. We didn’t have banks providing us with a balance sheet or anything like that when we started, so consequently we needed to pay the bills, and we did business with companies that were of a poorer credit rating . . . The truth is in growing our business we screwed up a few times.’
Lex talked about the shock of finding ‘crappier’ companies that ‘are quite happy to screw you.’
He also said something that struck me as odd. ‘When you look at our financial statements, you will see that we took a number of hits [but] if you removed our credit losses . . . we have always been profitable at an operating level.’ That was like saying, we were always profitable, except for our losses. Was this the kind of charismatic sales talk that so many smart people had bought into?
He told me about how much he personally had on the line.
‘I am considered the controlling shareholder [of Greensill Bank]. Each year, I have to freshly sign a guarantee to the German Deposit Protection Authority for 100 per cent of the deposits, personally, in the event that they ever have to pay out under the deposit protection insurance . . . So trust me, I quite like living in the house that I live in and I like driving the car that I drive.’
Lex even told me that he agreed with the critics of SCF who said it was a way for big corporations to hide the true extent of their borrowings.
‘It’s an odd thing to me that rating agencies have ever said that somehow a trade obligation is somehow different to money you borrowed from a bank, or from a bondholder. That’s insane; it’s still a dollar that you owe someone.’
It was an extraordinary admission that seemed to run counter to the rationale for recent years of rapid growth in SCF. He went on.
‘Saying that because you owe it to a supplier, somehow that’s not really a debt is, frankly, a nonsense . . . but so long as rating agencies want to maintain the fiction that a real trade creditor that is not supported by some special supply chain finance promise that’s being made to a bank is non-debt, then companies are going to want to make use of that.’
OK, so it’s a nonsense, but you can make money out of it.
Lex made some astonishing claims: 2.3 million companies relied on Greensill every day; Greensill funds the receivables on 51 per cent of all containerized seaborne freight in the world. These claims and others were incredibly hard to prove.
Eventually, we got to more challenging ground.
I pushed Lex on the loans to a series of odd clients – companies like Tower Trade and Atlantic 57 Consultancy, which had received tens of millions of dollars from funds that Greensill managed. Even a cursory look through their accounts would tell you that some of these companies had next to no ability to pay those loans back. Many of them also had personal connections to Lex. I asked him at length about Sanjeev Gupta.
At first, Lex brushed aside my questions. ‘We can’t talk about clients.’ But the more I probed, the more tense the meeting became.
Lex was agitated. He said I was torturing him with the questions. He and James Doran insisted that it was unfair to ask about facts that I only knew about because they were more transparent than other providers of SCF, though I pointed out that they had to be more transparent because they were selling their SCF programme through regulated funds that were sold to investors.
Eventually, it was clear that no real answers were forthcoming. Lex’s face reddened and he slammed his fist on the table. ‘There’s nothing wrong with doing business with friends,’ he spat out. ‘If you’re going to keep insinuating otherwise, then this meeting is over.’ He slammed his fist on the table again. As far as I was concerned, there was no point in continuing the meeting if I couldn’t ask difficult questions.
THE MEETING HAD been full of interesting details. And I had a better sense of who Lex really was. But there were so many more questions than answers. I wrote a series of scoops in The Wall Street Journal, with my colleague Julie Steinberg, and in other Dow Jones publications like Financial News and Barron’s. Other reporters were also writing stories about Lex. But for some reason, Greensill insiders told me, my name really needled him.
In November 2019, at a SoftBank event in California, Lex was guest of honour. Right before he was due on stage in front of dozens of other CEOs whose companies were backed by SoftBank, Lex found out that my colleague, Eric Savitz, a columnist at Barron’s, was in the room. Savitz is a great reporter. He is also a good guy. Lex stormed over and demanded Savitz leave. Savitz didn’t even know who Greensill was then. It was an angry confrontation that was only smoothed over after SoftBank media relations people intervened and persuaded Lex to continue.
It was a little later, in February 2020, when my bag was stolen from my car as I met my family for a meal near Oxford Street. A few months after that, Greensill insiders told me that Lex and Doran did have a private investigator on a kind of permanent retainer. Lex had also talked openly about having Daniel Sheard – the whistle-blower – followed, to see whether he was talking to any reporters. I couldn’t be sure about the break-in. Maybe the whole thing was a sign of my paranoia as I dealt with this complex, confusing company, where getting to the truth seemed so incredibly difficult.