A Tasmanian smelter collapsed and left hundreds of locals out of work after its Indian billionaire owner stripped it of about $200 million to prop up his UK operations, administrators claim.
Controversial businessman Sanjeev Gupta’s GFG Alliance took over the then-profitable Liberty Bell Bay manganese smelter in 2021, but the company was placed into voluntary administration in March and officially closed last week, resulting in the loss of 214 jobs.
A report by creditor EY Parthenon issued on Friday indicates that the smelter could have remained profitable if Mr Gupta had not loaned $191 million of its cash to his other businesses, the Mercury reported.
The administrators also stated that they believed the company had been operating while insolvent since May last year, months before the unknowing Tasmanian government gave it a $20 million loan, $14 million of which was spent on a single ore shipment that was delivered but never used.
Deputy Premier Guy Barnett said the revelations were concerning, and that the state government “threw everything” at the smelter to try and keep it open, including a $20 million joint federal and state offer made last week.
“The administrators have highlighted the absolute irresponsible behaviour of Sanjeev Gupta and GFG,” Mr Barnett said.
“Our security is the ore … and that is why that due diligence was undertaken and that security was locked in on behalf of the taxpayers.”
According to the report the smelter made a net profit after tax of $56 million in 2022-23, but in the four years since lost $160 million, and then entered limited operations in 2025 due to ore shortages, all while Gupta was stripping it of cash.
“Since acquisition of the Bell Bay facility from South32 in January 2021, intercompany loans have been made to various companies in the GFG Alliance,” the report stated.
“Working capital has deteriorated materially from $153m in FY22 to $9m in the year to date in 2026.”
The report also found that Mr Gupta damaged the plant and equipment by using alternative ore from West Africa, that employees are owned $27.9 million, and that directors may have broken the law.
“Further investigations into the conduct of the former directors are required to determine whether any additional offences have occurred that may warrant reporting to ASIC,” the report said.
“At this stage, the administrators have not made any assessment as to the financial capacity of the former directors to meet any potential actions that we may identify.”
Administrators wrote to Mr Gupta requesting the return of the $191 million but received no response, and a vote on whether to liquidate the company will be held next week.
Mr Gupta also bought the Whyalla Steelworks in South Australia and the Tahmoor Coal mine in NSW, both of which have also collapsed into administration, and still owns InfraBuild, which posted a loss of $250 million in the last financial year.
The South Australian government removed Mr Gupta last year and the Whyalla plant has since been run by administrators at KordaMentha, who said the steelworks was losing $1.5 million a day, in part because it was selling products too cheaply to Infrabuild.
Header image: Left, Sanjeev Gupta and wife Nicola (GFG Foundation). Right, the Liberty Bell Bay smelter (Liberty Steel Group).
