Sanjeev Gupta’s business empire is being investigated by prosecutors in Paris in another blow to the steel tycoon. GFG Alliance, an informal group of metals and energy companies including Liberty Steel, has faced a litany of challenges since the collapse in March of its key lender, Greensill Capital. The collapse triggered a scramble for a new source of financing for Gupta’s companies, as well as investigations by the UK’s Serious Fraud Office and German regulators. GFG’s interests range from Liberty, a UK steelmaker that employs 3,000 people, to aluminium, mining and energy companies as far afield as Singapore, the US and Australia. The group says it employs as many as 35,000 people worldwide with combined annual revenues of £15bn, although it does not produce consolidated accounts. The Paris prosecutor’s office on Monday confirmed it had opened its investigation into “various operations within GFG” on 23 July into allegations of “misuse of corporate assets” and “money laundering”. The investigation will be handled by France’s central office for combating corruption and tax offences, a spokesperson said. A GFG Alliance spokesperson said: “GFG is not aware of any such investigation and refutes any suggestion of wrongdoing in its French operations.” A report by British MPs last week raised a series of concerns over Gupta’s leadership of GFG, including corporate governance, unusual funding and company structures, and a series of accounting “red flags”. GFG denied Gupta had not met his obligations as a director, after the MPs said the Insolvency Service should investigate. GFG’s French assets include Europe’s largest primary aluminium smelter, situated in Dunkirk, northern France. The smelter is the subject of a legal dispute with American Industrial Partners, a US private equity firm that claimed ownership after an alleged default on debt by GFG. The Financial Times, which first reported the existence of the French investigation, said the French prosecutors were looking at a deal between GFG and FTSE 100 commodities company Glencore to refinance the smelter, as well as a government-supported loan for another plant in Poitou, central France. GFG’s spokesperson said: “There was a commercial agreement with Glencore at market rates to secure stable financing for the business. “We abided by all the rules and invested €45m [£39m] of shareholder funds into French downstream assets including Poitou while under our ownership.” Glencore said it “entered into arm’s length commercial arrangements with Dunkirk which were actively negotiated and were the subject of due diligence and review”. GFG added that there were no outstanding liabilities to a plant at Ascoval, which it sold in August to German steel company Stahl-Holding-Saar as Gupta tried to stabilise his group. The French government had in March loaned €20m to the Ascoval works.