THE auditor of a small company owned by metals tycoon Sanjeev Gupta resigned saying it could not agree with the valuation of assets, according to a letter filed with the UK corporate register, Companies House.
MHA MacIntyre Hudson said it was stepping down as auditor of Liberty Precision Tubes Ltd., which manufactures steel tubes, after failing to agree the extent to which the value of “tangible fixed assets” should be impaired, or the estimated value reduced, in the firm’s accounts for the year to the end of March 2018.
The only tangible fixed assets listed in the accounts are plant and equipment.
“Our assessment of the impairment was significantly greater than the Company’s assessment,” said the letter, which was dated May 30 and made publicly available by Companies House in recent days.
The accounting firm didn’t specify the gap between it and the company’s assessment but said that the tube maker’s profits for the year and net assets weren’t affected.
The steel tube maker is a wholly owned subsidiary of Liberty House Group, part of the GFG Alliance conglomerate that manages the industrial, finance and metals investments of the Gupta family.
Spokespeople for GFG, Liberty House Group and Liberty Precision Tubes were not immediately available for comment.
Liberty Precision Tubes had revenues of £24.7 million for the year ended March 2018, the latest publicly-available accounts show. GFG has annual revenues in excess of $10 billion.
MHA MacIntyre Hudson, a mid-sized audit firm based in London, declined to comment. The financial year to the end of March 2018 would have been MHA MacIntyre Hudson’s first time auditing the tube maker, accounts show.
GFG has grown rapidly in recent years, buying often troubled metals manufacturing facilities, including in the UK, Australia and the US. To help fund acquisitions, GFG has raised billions of dollars via bond deals.
Concerns over bonds issued by GFG Alliance related to a biodiesel-fuelled power generating business prompted a whistle blower at Swiss asset manager GAM Holding AG to alert UK financial regulators, as previously reported.
In February 2016, Liberty House Group purchased the assets of Caparo Precision Tubes Ltd, which had fallen into administration, for £2.3m, according to publicly-available financial statements.
That included paying £1.3m for plant and equipment, which were revalued upon purchase and ascribed a value of £24.9m, according to company financial statements.
The auditor, in the letter, didn’t say whether the amount it assessed the assets should have been written down by was greater than the £2.1m impairment that was recorded in the tube maker’s 2018 accounts, which were filed with Companies House last month after being audited by another firm, London-based King & King.
King & King was not immediately available for comment.