The steel sector overseen by British industrialist Sanjeev Gupta has encountered significant challenges, including delayed staff payments, despite completing a $70 million sale of its US operations.

Gupta’s GFG Alliance finalized the sale of its Engineered Wire Products division amidst a significant downturn in the market.

As negotiations concluded, employees at Liberty Steel, a subsidiary of GFG Alliance based in the UK, expressed concerns as their wages and pension payments were not disbursed on schedule.

The Engineered Wire Products division specializes in manufacturing mesh wire products essential for reinforcing concrete in both commercial and residential construction projects. GFG Alliance initially acquired this business following its expansion into the US with the $320 million purchase of Keystone Consolidated Industries in 2019.

During this acquisition, GFG gained a portfolio of companies including Keystone Steel and Wire, Engineered Wire Products, Strand Tech Manufacturing, and Keystone Bar Products. This initiative was part of a broader strategy to eventually list the US segment of Liberty Steel on the stock exchange, with Credit Suisse appointed to oversee the initial public offering.

Insteel Industries, a publicly traded US steel manufacturer, has now purchased Engineered Wire Products in a cash transaction. An announcement regarding the sale was made on October 21 in the US, which notably did not mention Gupta or GFG Alliance. However, just three days later, news outlets in the UK reported that steelworkers were expressing outrage over their unpaid wages.

Workers at Liberty Steel’s facilities in Rotherham and Stocksbridge voiced their frustrations to The Star, a regional publication, prompting Alun Davies, national officer for steel at the Community union, to request a meeting with Gupta to address the “totally unacceptable” delays.

A spokesperson for Liberty Steel assured The Star that funding for salaries had been secured and was being prioritized for processing. The spokesperson emphasized the company’s commitment to preserving jobs and focusing on sustainable, profitable operations during this challenging market period.

On Friday, a representative from Liberty Steel informed The Times that all workers had received their salaries, resolving the payment delays.

Gupta’s steel empire has faced significant turmoil since the downfall of its principal lender, Greensill Capital, in 2021. The financing practices of Greensill have come under scrutiny, particularly following the revelation of former Prime Minister David Cameron’s involvement as an advisor and lobbyist for the firm.

Credit Suisse, the Zurich-based bank that faced difficulties in the previous year, was also implicated due to its exposure of $10 billion to Greensill, which has led to numerous legal challenges as creditors aim to recover funds from Greensill’s insolvent estate.