The Pyramid of Lies - The collapse of Greensill Capital

Lunch Money

In this episode we dive into the collapse of Greensill Capital with Duncan Mavin - Author of The Pyramid of Lies.

In the world of finance, many people invest without thoroughly reading complex documents. They trust established players, assuming due diligence has been done. This trust can lead to issues when promises don't align with reality.

Greensill Capital's rise and fall is a story of complex finance, layered with personalities. Lex Greensill's journey from a farming background to financial prominence is fascinating. His charisma and visionary image drew people in, blinding them to potential red flags.

Lex's actions and the recurring financial scams in the industry raise questions about the underlying motivations and mindset of individuals like him.

The pursuit of high society and credibility in the financial world drove Lex to build an image of success, utilising relationships with prominent figures like David Cameron. He played a pivotal role in opening doors for Lex and Greensill, leveraging his political connections to secure funding and access to influential leaders, such as Muhammad bin Salman.

The problem with supply chain finance, as exemplified by Greensill, is that it has been applied in ways that harm small businesses. Big buyers can coerce small suppliers into unfavourable deals, essentially holding their finances hostage. Although there's a move to make accounting more transparent, predatory practices still persist.

The story of Greensill is part of a larger pattern where financial schemes are portrayed as benevolent efforts to democratise finance. However, in reality, they often serve personal interests or attract investments based on inflated promises.

Lex Greensill's focus on branding and credibility-building using other people's money underscores the disconnection between the public image and the actual economic impact of such ventures.