Accountancy firm to be investigated for its role as auditors

AN investigation has been launched into the accountancy firm responsible for signing off the accounts for a range of steel tycoon Sanjeev Gupta’s business empire.

The Financial Reporting Council (FRC), which regulates the accounting industry, said it would be investigating accounts signed off by King and King for four Liberty Steel businesses.

Offices of Liberty Steel faced visits from Serious Fraud Office (SFO) investigators last week as part of a probe into suspected fraud and money laundering by parent firm GFG Alliance.

The FRC said it would be combing through accounts relating to Liberty Speciality Steels Ltd, Alvance British Aluminium Ltd (formerly Liberty Aluminium Lochaber Ltd) and Liberty Steel Newport Ltd for the year ended March 31, 2019.

It will also look at Liberty Performance Steels Ltd statements for the year ended March 31, 2020.

Mr Gupta was once lauded as the “saviour of steel” for rescuing factories, but has come under heavy scrutiny amid accusations of potentially fraudulent trading after his main lender, Greensill Capital, collapsed a year ago.

GFG used so-called supply chain finance services offered by Greensill.

This meant that if GFG sold a product to a different company, it could send the invoice to Greensill and be paid right away, rather than having to wait potentially months for the customer to pay its bills.

Bringing in money this way can be useful for companies with tight cash flows.

However, how Greensill and GFG did business together is being investigated by the fraud investigators.