The UK audit regulator has launched investigations into Sanjeev Gupta’s Greensill Capital and Wyelands Bank auditors following the collapse of the commercial finance specialist.
The Financial Reporting Council will investigate Saffery Champness for its 2019 audit of Greensill’s accounts and will separately review PricewaterhouseCoopers LLP, which was audited by Wyelands Bank. The investigations will be carried out by the regulator’s enforcement division, it said on Monday.
Investigators are beginning to round up both the steel magnate Gupta and the now-defunct Greensill Capital, after months of scrutiny by lawmakers and the media over their financial practices. GFG has been under the microscope after Greensill’s collapse in March revealed that it had received financing based on expected future invoices, for sales that were simply forecast.
Gupta’s GFG Alliance is also facing investigations by UK prosecutors on suspicions of fraud and money laundering. Gupta-controlled Wyelands Bank will be liquidated if no buyer is found after the Bank of England ordered the money to be returned to all depositors.
Greensill’s banking arm was shut down by the German regulator in March, shortly after the collapse of its parent company. The auditor has now retracted his approval of the 2019 accounts amid allegations of wrongdoing.
“It is understandable that there is regulatory scrutiny in situations like this,” said a PwC spokesperson. “We will cooperate fully with the FRC in its investigations.”
The investigation comes as the FRC, hit by a series of accounting scandals, has told the big four companies (PwC, EY, KPMG and Deloitte) to split their consulting and accounting branches by mid-2024 to improve the rigor of accounting. your audits and reduce the scope of conflicts of interest.
“Audit quality is a top priority for Saffery Champness and we are committed to maintaining the high professional standards that our clients rightly expect,” said a Saffery Champness spokesperson. The company will cooperate “fully with the FRC”.