Around 3,000 jobs across the country are at risk, including many in Scunthorpe, as the taxman attempts to force a steel tycoon to wind up his empire.
It is being reported that Her Majesty’s Revenue & Customs has filed a ‘winding-up petition’ against the speciality steels division of Sanjeev Gupta’s Liberty Steel, with the firm owing the taxman millions of pounds.
The empire has been under threat since financial backer Greensill Capital collapsed a year ago.
The companies under threat include the Liberty Merchant Bar within Scunthorpe’s British Steel, as well as Liberty Performance Steels in the West Midlands, Liberty Pipes in County Durham and Speciality Steel UK in South Yorkshire.
A Liberty Steel spokesperson said: “Our priority has been to protect thousands of jobs in the UK.
“We are committed to repaying all our creditors and continue to work with all stakeholders around the UK to create a sustainable future for our businesses following the collapse of Greensill Capital.
“Against a very challenging backdrop in the UK with record high energy prices and imports we have provided tens of millions in funding to keep our people in employment and maintain operations to serve customers and strategic supply chains while we complete our refinancing.
“We are in continuous dialogue with all our creditors including HMRC to find an amicable solution that’s in the best interest of all stakeholders.
“Short-term actions that risk destabilising these efforts are not in anyone’s interest, and undermine creditor recovery at a critical stage in our debt restructuring efforts that seek to secure the future of our businesses.”
A spokesperson for the steel unions Community, Unite and GMB has described the action as “devastating blow” for workers, and believes Liberty Steel can have a sustainable future.
The spokesperson said: “This action by HMRC threatens thousands of jobs and is a devastating blow to our members and their families.
“Liberty Steel is a strategically important business, crucial to delivering net zero, and under no circumstances can our plants be allowed to close.
“The trade unions call on GFG and HMRC to get back round the table and hammer out a deal that provides space for the company to refinance. The best route to protect jobs and repay HMRC and other creditors would be to enable the business to continue to trade.
“Our experts have advised us that with the right framework of support Liberty Steel can have a sustainable future. The government has an important role to play in providing that framework and must take urgent action to address our unaffordable energy prices.”