UK regulator investigates auditors of Greensill, Wyelands Bank

BRITAIN’S accounting regulator initiated an investigation into the audits of Greensill Capital, the collapsed financial backer of industrialist Sanjeev Gupta.

The Financial Reporting Council (FRC) stated on Monday (28) that it has begun a probe into accounting firm Saffery Champness, which audited financial statements of Greensill Capital, and PwC, the auditor of Wyelands Bank.

Wyelands Bank was controlled by Gupta, and lent money to his other firms.

The regulator said it was looking into Saffery Champness's audit of Greensill Capital's financial statements for the year ended December 2019.

It was also examining PwC’s audit of the consolidated financial statements of Wyelands Bank for the year ended April 2019.

Greensill slipped into administration in March, raising concerns over the future of GFG Alliance.

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

Greensill's founder, Lex Greensill, was an adviser to the government during Cameron's tenure as prime minister.

Besides, GFG is undergoing an investigation into suspected fraud, fraudulent trading and money laundering by the Serious Fraud Office.

"Audit quality is an absolute priority for Saffery Champness and we are committed to upholding the high professional standards our clients rightly expect," Saffery said in a statement.

PwC said it was understandable that there is regulatory scrutiny in "situations like this".

"We will cooperate fully with the FRC in its enquiries. We share the FRC’s commitment to audit quality and are two years into a wide-ranging programme to enhance audit quality across the firm," PwC said in a statement.

Separately, Stephen Rose, chief executive of Wyelands Bank, will appear in front of MPs on the Business, Energy and Industrial Strategy select committee on Tuesday (29) to answer questions related to Liberty Steel, owned by Gupta.

Concerns have mounted about the fate of Liberty Steel’s British plants after the collapse of Greensill. The company is one of the leading steel producers in the UK, employing about 3,000 people across the country.