Auditor MHA resigns from Sanjeev Gupta-owned engineering firm
MHA has resigned as auditor for a subsidiary of the beleaguered metals group controlled by tycoon Sanjeev Gupta, City PM can reveal.
The London-listed accounting firm has stepped down as auditor of Wolverhampton-based Clydesdale Engineering, an automotive and defence manufacturer owned by Gupta’s Liberty Steel Group, part of his GFG Alliance conglomerate.
MHA declined to comment on the rationale behind its decision to step down.
The firm told City PM in a statement: “Our resignation letter has been filed with Companies House and will appear shortly. Until it does, we cannot comment any further on the circumstances surrounding our resignation.”
A source close to MHA said it was highly unusual for the company to resign as auditors of a business, adding that there has been greater internal scrutiny over which firms it chooses to partner with following its admission to the London Stock Exchange in April.
A GFG Alliance spokesperson said: “A new auditor is on board and has started work on auditing the latest set of accounts.” GFG decline to reveal the name of the new auditor.
Another auditor quits
MHA’s decision to step down marks the latest auditor resignation for GFG after accounting group King & King resigned as auditor for several GFG-owned firms in 2022 following an investigation by the accounting regulator, the Financial Reporting Council, into its audits of the companies.
GFG Alliance has been under investigation by the UK’s Serious Fraud Office (SFO) since May 2021 over what it described as “suspected fraud, fraudulent trading and money laundering” in a probe that is also exploring the family office’s relationship with Greensill Capital. GFG denies any wrongdoing.
Gupta is being prosecuted over his alleged failure to file accounts for more than 70 UK companies of which he is a director. He is contesting the charges.
In May, Gupta placed his commodities trading arm, Liberty Commodities, one of the oldest parts of the GFG empire, into insolvency.
MHA is understood to continue in its role as auditor for Clydesdale Engineering’s sister firm, SMT Defence, which is also part of GFG.
In its previous audit for Clydesdale, the accountancy business did not flag any issues other than a reference to the SFO investigation.
The accounts, which were signed off in March, showed Clydesdale posted turnover of £16.3m in 2024, a rise of 8.4 per cent on the previous year, while pre-tax profit tripled to £165,000.
According to the accounts, Clydesdale earlier this year entered into a series of intercompany debt transfer agreements with other parts of the Gupta empire. However, Clydesdale said it “has never had any direct relationship with or received any direct funding from Greensill.”