Sanjeev Gupta’s GFG Alliance has started legal action in the British Virgin Islands to prevent creditors taking over a subsidiary, in the latest sign of the metals tycoon’s mounting difficulties. Gupta has been battling on multiple fronts to preserve his commodities and energy empire since March after the collapse of his major financial backer, Greensill Capital. The collapse has put severe pressure on parts of GFG, including Liberty Steel metalworks, that employ thousands of people in the UK and Australia. GFG’s creditors started proceedings last month to put one of its companies, Simec UK Energy Holdings, into receivership, a process often used to recoup money from a borrower that has breached obligations such as making loan repayments. The dispute has come to light because the British Virgin Islands company holds a 43% stake in Britain’s largest tidal power company, Simec Atlantis Energy (SAE). It operates the world’s biggest tidal stream project in Pentland Firth, off the coast of John o’Groats, near Great Britain’s northernmost point, and is also developing projects off the coasts of Japan, China and France. SAE was forced to update the stock market on Wednesday, saying GFG had informed it of the legal action, which is intended to “challenge the validity of the receiver’s appointment”. GFG’s creditors do not have any claim on SAE, but the dispute has proved difficult for the smaller company, whose projects generate electricity from tides using 20m-wide underwater turbines. It also converts coal-fired power plants to run on wood pellets. Gupta bought his stake in SAE in 2018. As part of the deal SAE added the branding and name of Gupta’s Simec energy interests. The company is operationally separate from GFG but GFG has the right to appoint two people to SAE’s board. Other GFG companies have also faced efforts by creditors to recoup money. Representatives of Credit Suisse have previously started action to push Liberty businesses in London and New South Wales, Australia, into insolvency. GFG has not revealed the identity of the creditor that appointed the British Virgin Islands receiver, and a spokesperson declined to comment on Wednesday. The latest legal troubles add to other problems faced by Gupta. The UK’s Serious Fraud Office last month revealed an ongoing fraud investigation into GFG Alliance. That investigation has in turn made Gupta’s efforts to find a new lender to replace Greensill much more complicated, prompting one US investor to pull out of a planned deal. Shares in SAE listed on London’s Aim stock market fell by 5% on Wednesday to 6.65p, near all-time lows hit last month when the Simec receivership was first revealed.