French prosecutors widen investigation into Sanjeev Gupta's GFG group

French authorities have opened an investigation into Sanjeev Gupta's business empire, the Financial Times reported on Sunday citing the Paris Prosecutor's Office. The Prosecutor's Office told the newspaper that it was probing Gupta's French operations over allegations of "misuse of corporate assets" and "money laundering".

The investigation was launched in July after suspicious activities were reported by public officials, the FT said.

GFG said it was "not aware of any such investigation and refutes any suggestion of wrongdoing in its French operations".

Public officials flagged Gupta's deal with commodities trader Glencore Plc to fend off a takeover attempt by US private equity firm American Industrial Partners (AIP), according to the FT.

"There was a commercial agreement with Glencore at market rates to secure stable financing for the business," GFG said in a statement.

Officials also reported GFG's use of 25 million euros ($28.89 million) from the Dunkirk smelter to pay off litigation costs that stemmed from a dispute with global mining group Rio Tinto, the report said citing people briefed on the matter.

In August, GFG said it had settled a dispute with Rio Tinto over the acquisition of the Dunkirk aluminium smelter in 2018.

The Paris prosecutor's office could not immediately be reached for comment on Sunday.

GFG has been scrambling to refinance its cash-starved web of businesses in steel, aluminium and energy after supply chain finance firm Greensill filed for insolvency in March.

Earlier in May, Britain's Serious Fraud Office (SFO) had opened a probe into Gupta's commodities empire. The probe entailed the conglomerate's links to collapsed lender Greensill Capital.