By Robert Miller | Portfolio Manager at NAOS Asset Management
The Pyramid of Lies: Lex Greensill and the Billion-Dollar Scandal by Duncan Mavin
As the European Financial Editor of the Wall Street Journal, Duncan Mavin covered the story of Greensill for years before its sudden collapse into administration in 2021. His recently released book well & truly peels back the curtains of what happened behind the scenes at the ‘innovative unicorn financial lender’ founded & led by the ‘Bundaberg billionaire’ Lex Greensill.
When reading this book, the famous Warren Buffet quote “only when the tide goes out do you discover who's been swimming naked” certainly becomes front of mind. The Greensill story contains infamous characters whom all played their part in how this business started to, and continued to spiral completely out of control. At the head of it, all was the high powered shot caller Lex Greensill whom appeared to be constantly jumping from one potential disaster to the next in the constant, sometimes desperate hope that this house of cards could be repaired.
Behind the curtains there were an ever increasing number of red flags piling up. Troublesome clients, dangerous client exposures levels, how investor funds were spent, cash burn rates, rebranding & reshuffling of bad loans, funding loans that didn’t exist, internal communication procedures, private jet purchases, government investigations, insurance exposures and purchasing their own bank. Nobody seemed to listen to the risk department.
Whether the story of Greensill is characterised by deception, delusion, ego, greed, bad luck, or a combination of these, you be the judge. One thing is for certain, the fallout from all of this has more to play out.
Link to Book
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