Travel Guides – Greensill auditor under investigation by watchdog

Sanjeev Gupta

The UK’s accountancy watchdog has launched an investigation into the auditor of Greensill Capital, the collapsed monetary backer of industrialist Sanjeev Gupta.

The Financial Reporting Council has begun a probe into accountancy agency Saffery Champness.

It additionally introduced an investigation into PwC, which audited monetary statements made by Wyelands Bank.

The financial institution was managed by Mr Gupta but additionally lent cash to his different companies.

The FRC mentioned it was trying into Saffery Champness’s audit of Greensill Capital’s monetary statements for the 12 months to 31 December 2019.

The provide chain finance firm went bust in March, elevating considerations over the way forward for GFG Alliance, the sprawling empire managed by Mr Gupta and his household which owns the UK’s Liberty Steel.

Following the collapse of Greensill, it emerged that the previous prime minister David Cameron had unsuccessfully lobbied senior members of the federal government and former colleagues for loans on behalf of the corporate.

Greensill’s founder, Lex Greensill, was an adviser to the federal government throughout Mr Cameron’s time as prime minister.

In May, the Serious Fraud Office introduced an investigation into “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance, including its financing arrangements with Greensill Capital”.

A spokesman for Saffery Champness mentioned: “As professional accountants we owe a duty of confidentiality to present and former clients and, with this matter the subject of investigation, it would not be appropriate to comment at this time save to say that Saffery Champness will of course be co-operating fully with the FRC.”

The FRC mentioned it was additionally inspecting PwC “in relation to its audit of the consolidated financial statements of Wyelands Bank for the year ended 30 April 2019”.

Analysis box by Dominic O'Connell, business correspondent

Analysis field by Dominic O’Connell, enterprise correspondent

There is not any scarcity of official enquiries into the collapse of Greensill Capital and the affairs of one in every of its major shoppers, GFG Alliance, the group of corporations presided over by the metals tycoon Sanjeev Gupta.

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Parliamentary choose committees are doing a put up mortem on the previous, and making an attempt to work out the way forward for the latter as a part of a wider probe of the way forward for the metal trade.

The Serious Fraud Office is investigating suspected fraud, fraudulent buying and selling and cash laundering inside GFG, together with its relationship with Greensill.

Today’s bulletins, nevertheless, present a brand new entrance being opened and a brand new query requested. How was Greensill in a position to come to this point, and to look in respectable monetary well being, solely to collapse so abruptly? Were its accounts to not be trusted?

The FRC has additionally begun an inquiry into PwC’s auditing of Wyelands Bank, a part of the GFG community. Wyelands has been under a shadow for a while. It is predicted to be offered or wound up after Mr Gupta mentioned he wouldn’t present any extra funding.

If FRC workers are on the lookout for some groundwork for his or her investigation, they might wish to tune into Tuesday’s proof session on the Business, Energy and Industrial Strategy choose committee. The first witness earlier than MPs shall be Stephen Rose, Wyelands’ chief government.

Mr Gupta purchased Wyelands, previously often known as Tungsten Bank, in 2016 for £30m.

Last month, Bank of England governor Andrew Bailey said that in 2019, the Bank’s Prudential Regulation Authority banking watchdog had launched an investigation into the enterprise over considerations “connected lending in the context of the ultimate beneficial owner who is Mr Gupta”.

He mentioned the Bank notified the National Crime Agency and set out its considerations to the Serious Fraud Office in early 2020.

Earlier this 12 months, the Bank of England pressured Wyelands at hand again £210m in deposits to clients.

A spokesman for PwC mentioned: “It’s understandable that there is regulatory scrutiny in situations like this. We will co-operate fully with the FRC in its enquiries.”