Watchdog probes Greensill and Gupta’s accountants as UK boss quits tycoon’s steel empire
Accounting regulator HE today announced two investigations into scandal-stricken auditors working with Sanjeev Gupta and Greensill just hours before the Indian tycoon’s GFG empire announced only the chief of its steel operations in the United Kingdom left a little over a year in his post.
The Financial Reporting Council is investigating PWC regarding its audit of Mayfair-based bank Wyelands de Gupta, and the work of small business Saffrey Champness in the audit of Greensill Capital (UK).
Although the two investigations are separate, the FRC announced them simultaneously on its website today.
Wyelands was started by steel mogul Gupta in 2017, but came to the attention of regulators after the Financial Times revealed that a large chunk of the bank’s loans were to companies linked to Gupta.
The Bank of England ordered him to return money to his savers.
PWC said it would cooperate with the FRC, saying it had been “two years in a broad program to improve audit quality across the firm.”
The FRC is reviewing its work to audit Wyelands’ accounts for the year up to April 2019.
The FRC said it was surveying Saffery Champness for its Greensill audit in the year through December 2019.
Saffery Champness said it would not be appropriate to comment due to his duty of confidentiality to current and former clients. He said he was also cooperating with the FRC.
Greensill’s accounts were signed by Michael Di Leto, Principal Statutory Auditor of the Saffery Champness office on Queen Victoria Street.
Those of Wyelands Bank for the fiscal year ended April 2019 were signed by Jonathan Hinchliffe, senior auditor of PWC.
The FT reported last year that Wyelands had helped fund Gupta’s wider trading network through a series of shell companies.
He also revealed that Gupta, formerly known as the ‘Savior of Steel’, had plans in place to open a bank in Panama before UK regulators allowed him to buy the bank he would rename. Wyelands.
Shortly after the FRC announced its investigations, GFG Alliance said Jon Ferriman, who became head of Liberty Steel UK in May of last year, was “resigning”.
He will be replaced as managing director by Roy Chowdhury, managing director of India’s largest steelmaker, Steel Authority of India. He will be backed by Anton Krull, who, as the new CFO, faced MEPs from the Business, Energy and Industrial Strategy Committee last week.
In an update on the restructuring of GFG, the company said it is still trying to sell its UK operation of aerospace steel and special alloys to Stockbridge so that it can focus its efforts here on developing its Rotherham plant into a low carbon electric arc furnace.
It is also looking for buyers for its UK engineering branch which supplies car manufacturers. GFG and its clients would continue to provide enough liquidity to keep it alive.