British Steel auditor quits in fresh blow to Chinese owner

BRITISH STEEL’S auditor has quit after struggling to verify £45m in stock, dealing a fresh blow to the Chinese-owned industrial giant as it seeks state support for its net zero plans.

The Scunthorpe-based company’s audit firm, Moore Kingston Smith, resigned last week, saying it was unable to “satisfy” £45.8m worth of stock.

The auditor also flagged “material uncertainty” about British Steel’s future amid ongoing heavy losses.

British Steel told trade unions last October that it was losing up to £30m a month. The steelmaker’s most recent accounts show it made a loss of £50m in 2021.

Moore Kingston Smith said the company would need more funding from Jingye, its Chinese owner, if losses continued. It is the second auditor to resign from working with British Steel in as many years. Previous accountants, Mazars, resigned in July 2022.

Though the company has reportedly hired a new auditor, the loss of Moore Kingston Smith is a blow to British Steel’s hopes of securing UK state subsidies to fund a net zero overhaul.

British Steel’s owner, Jingye, hopes to receive £600m from the Government to fund closure of its blast furnaces and replace them with electric ones – which could affect 2,000 jobs. British Steel employs 4,500 workers.

A clean set of accounts is thought to be a sticking point in negotiations with ministers. The accounts for 2021, filed last week, were severely delayed and filings for the year ending December 2022 were due to be filed last September.

British Steel and Moore Kingston Smith were contacted for comment.

A British Steel spokesman told The Times that Jingye “continues to stand steadfastly behind us as we embark on the biggest transformation in our history, and it is committed to investing in the long-term future of British Steel as we transition to net zero”.