U.K. To Investigate Audits Into Greensill and Gupta’s Bank
(Bloomberg) -- The U.K.’s audit regulator has begun investigations into the auditors for Greensill Capital and Sanjeev Gupta’s Wyelands Bank following the collapse of the trade finance specialist.
The Financial Reporting Council will probe Saffery Champness for its audit of Greensill’s 2019 accounts and will separately look at PricewaterhouseCoopers LLP, which audited Wyelands Bank. The investigations will be conducted by the regulator’s enforcement division, it said Monday.
Investigators are starting to round in on both steel magnate Gupta and the now-defunct Greensill Capital, after months of scrutiny from lawmakers and the media over its financing practices. GFG has come under the microscope after the collapse of Greensill in March revealed it had been a recipient of financing based on expected future invoices, for sales that were merely predicted.
Gupta’s GFG Alliance is also facing probes from U.K. prosecutors over suspicions of fraud and money laundering. Wyelands Bank, controlled by Gupta, is set to be wound up if no buyer is found after the Bank of England ordered that all depositors should have their money returned.
Greensill’s banking arm has been shuttered by the German regulator in March, shortly after the collapse of its parent company. The auditor has now retracted its sign-off of the 2019 accounts amid allegations of irregularities.
“It’s understandable that there is regulatory scrutiny in situations like this,” a spokesperson for PwC said. “We will cooperate fully with the FRC in its inquiries.”
The probe comes as the FRC, stung by a series of accounting scandals, has told the Big Four firms -- PwC, EY, KPMG and Deloitte -- to split their consulting and accounting arms by mid-2024 to improve the rigor of their audits and reduce the scope for conflicts of interest.
“Audit quality is an absolute priority for Saffery Champness and we are committed to upholding the high professional standards our clients rightly expect,” a spokesperson for Saffery Champness said. The firm will cooperate “fully with the FRC.”
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