FL-2022-000014 - [2025] EWHC 2631 (Ch)

The Covid-19 pandemic led to a decline of global markets in March 2020. This affected Greensill’s liquidity.

On 24 March 2020 SBG invested $1.5 billion in the SCF Subfund. An internal SBG Investment Division presentation recorded: “The purpose of the investment was to support the operations of Greensill Capital whose supply chain deals are financed by the Fund”.

In return for the provision of liquidity, the SCF Subfund and CSFM entered into a side letter agreement with SBG (“the SBG Side Letter”). This provided that the SCF Subfund should acquire only notes sourced by the Greensill Group’s supply chain finance programme while SBG invested in the SCF Subfund.

SBG and Mr Greensill had agreed that SBG’s investment would be in place until 18 May 2020. However, GCPL requested two extensions to the redemption schedule, first until 22 June 2020 and, later, until July 2020. In exchange for the delayed redemption schedule, SBG requested various shares in GCPL, and GCPL’s agreement to sell its corporate jets and to be audited by one of the Big 4 accounting firms.

When considering Mr Greensill’s second redemption request in June 2020, Mr Misra sent an email to Katsunori Sago (Executive Vice President, SBG), copying Mr Cheung, Mr Fan and others. He stated:

“Only internal SoftBank - Lex is slippery and prone to lying so the penalty has to be high.

He gives 3% extra stake no matter what the excuse if

- auditor is not upgraded by November, regulator approval or not.

- all the aircraft from the company/bank balance sheet is sold in the next 4 months.

- December quarter end audit is performed by a big 4 audit firm.”

By 16 July 2020 SBG’s investment in CSV was fully redeemed and the SBG Side Letter was terminated.

On 6 August 2020 Mr Son emailed Mr Greensill noting that it was necessary for the Greensill Group to reduce their costs:

“Lex,

I am glad to hear that business is starting to recover. The team has given me an update on the progress you have made in recent months.

I am worried about how market volatility can dramatically affect your business. Liquidity can go away fast and, if it does, you will not be able to fund your customers.

I know you are still growing the company as you expect a strong fourth quarter. But you need to reduce your operating costs in case volatility returns. The markets will be volatile again and your funding is still fragile.

You are a growth guy and so am I, but you need to lean towards discipline after the recent near death experience. There is no need to be so aggressive in the short term until you are sure of liquidity. Give yourself some cushion. Please cut your costs now.”