Mansions, promises, sinking towns: Paul Barry looks at how one man fooled the world
A delusional psychosis of self-entitlement. Is this a diagnosis to be found in psychiatry textbooks? Possibly not, but after reading Paul Barry’s The Big Steal I’m thinking that there’s a sound argument for an entire chapter.
Astonished and appalled, Barry chronicles the implosion of Sanjeev Gupta’s cruel fantasy: that he, and he alone, could save an ageing steel industry from the laws of thermodynamics and corporate governance. The ghastly aftermath of financial, industrial and personal disasters that Gupta has left in his wake will play out for years, and there are creditors beyond counting baying for his hide.
Did this failed steel magnate really believe he could kick-start a green metallurgical renaissance? If only he’d had enough time, enough credit, enough believers in his dream? It would be nice to think of Gupta as an industrial visionary born before his time – the Nikola Tesla of his day.
Barry makes abundantly clear that he was no such thing. The man’s utopian sales pitch, of clean, hydrogen-powered blast furnaces, was an economic and engineering fantasy, designed to milk the dreams of the desperate for whatever he could lay his hands on.
Gupta was no visionary. He was at best an opportunist, and at worst, well, that will be for the courts to decide.
But Gupta is a past master at prolonging fiscal examination, whether it be in courtrooms, by financial regulators, or before the banks and insurance companies who stood to lose too much, were his dreams to implode.
So, who is he? Readers may remember the fanfare accompanying the seemingly miraculous appearance of a dapper British Indian billionaire, coming to the rescue of the South Australian steel mills of Whyalla. The business was teetering on the brink of insolvency when he rolled into town in 2017. Not only the mills but the entire city was facing tumbleweed irrelevance, a rusting industrial memorial to a time before Asian mills could roll out steel for half the price.
Barry systematically dismantles Gupta’s illusory spiel; much as Gupta himself had pulled apart, and sold for scrap, struggling steel and smelter businesses from Wales to Whyalla, Romania to the Ruhr.
He dissects, in gruesome detail, the juggling of loans, lines of credit, insurance shuffles and government guarantees that have left hundreds of thousands of workers unemployed, and countless subcontractors broke.
Attempting to itemise the fiscal flotations that have kept the nostrils of Gupta’s sinking empire above the waterline for so many years would be pointless here.
But like the proverbial train wreck that you can’t take your eyes off, Barry’s forensic deconstruction of a house of cards that simply refused to collapse is irresistible reading.
Companies within companies, shelves of them, insured by desperate bankers who kept them on life support when any auditor worth their salt would have pulled the plug, have kept Gupta’s creditors at bay for years.
The bloke talked a good dream. And when you have industrial cities about to crumble, most politicians will share the dream. At least for a while.
Barry reminds us that Gupta’s descent upon Whyalla as an angel of salvation was the first time that most Australians had heard of him. His seductive assurance of the myriad jobs to flow from his “green steel revolution” was greeted by locals and the South Australian government with gleeful relief, and an astonishing lack of due diligence.
Gupta had apparently raised vast amounts of money for unlikely salvation projects all over the planet. Still, you’d like to think that Australian politicians and regulators, having witnessed the outrageous transgressions of Alan Bond, Christopher Skase and John Friedrich, would have been wary of a man with unverifiable credentials and a ravenous appetite for debt.
But no. As W. C. Fields put it, “Never give a sucker an even break”, and Gupta lived by Fields’ creed. His dismissive, almost casual self-assurance when confronted with ghastly real-world numbers is breathtaking at times. He saw no contradiction in spending more than $10 million on renovations to his palatial Point Piper house (one of several scattered across the globe), while his creditors in South Australia went to the wall, unable to pay wages or contractors’ invoices.
And if he did see one, it certainly didn’t bother him overly.
Barry’s demolition job on Gupta’s reputation is by turns infuriating (with the subject, not the author) and mind-bendingly complex (inevitably, given the tangled corporate shenanigans shoring up Gupta’s financial firewalls).
But his writing is lucid, surgical and merciless. His sympathies clearly lie with the myriad workers and businesses that have paid a heavy price, simply for believing in the prosperous future they’d been promised. He also takes mercy on his readers with a “one-eyebrow-raised” humour that lightens the load.
Before introducing a baffling description of a particularly outrageous legal defence mounted in court by Gupta’s counsel earlier this year, he warns the reader of the complexities to come.
The arguments, he warns, “appear on the face of it, even by Sanjeev’s standards, to be scandalous. So wrap a wet towel around your head and I’ll try to explain what he has attempted to do.”
An astonishing caper and, with Gupta under investigation in multiple countries, one that has yet to fully play out.
The Big Steal by Paul Barry is published by Allen & Unwin ($37) on September 8.
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