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Greybull Capital, the private equity firm which owned British Steel, is facing serious questions over the company’s collapse.

Greybull bought the business for £1 in 2016, and have since taken millions out of the company in management fees.

A fortnight ago the government agreed a £120m loan to cover British Steel’s cost of buying carbon credits under an EU-scheme to limit emissions. At the time it seemed a respectable use of public money since the delay in the UK’s exit from the EU meant the allocation of credits to all UK companies had been temporarily suspended.

But the FT later reported that Greybull had already sold surplus allocations in what appeared to be an a badly timed trade. Other UK steel producers, note, have not asked for loans to get over the permit obstacle. Again, there is an issue of trust with Greybull.

Related: Who are the villains of the British Steel crisis? | Nils Pratley

Devi Shah, Partner at law firm Mayer Brown, hopes that some jobs at British Steel can be saved:

The immediate priority will be to seek a buyer, and secure the future of as many employees as possible, especially since this is an area where options for those affected will be limited, and the repercussions are likely to be felt across the region.

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