Sanjeev Gupta’s auditor King & King quit over lack of evidence
The tiny firm that audits the accounts of Sanjeev Gupta’s steelmaking empire has said it resigned from auditing four of the magnate’s companies due to being unable to complete its audits because a “lack of sufficient information.”
In a letter filed to Companies House, King & King said it had resigned as auditor four of the magnates UK firms “due to a lack of sufficient information and evidence” relating to various matters including the firms’ ability to fund themselves and an investigation by the UK’s Serious Fraud Office (SFO).
The resignation letter says King & King was unable to complete its audits due to a lack of information and evidence around the “alleged fraud(s) and any internal investigation by the respondent companies” as well as the “recoverability of related party balances”.
The letter comes after French and British authorities seized documents from various addresses linked to Gupta’s Liberty House Group of companies in April, following the SFO’s decision to launch an investigation into the magnate’s business empire last year.
Gupta’s steelmaking businesses have faced scrutiny over their links to supply chain financier Greensill Capital, which collapsed into insolvency in March after lending eight of the tycoon’s companies a combined sum of £400m.
The UK’s Financial Reporting Council (FRC) audit watchdog later launched a probe into King & King itself in September, over its audits of four of Gupta’s companies.
King & King resigned from auditing four of Gupta’s UK steelmaking companies last week, including Liberty Specialty Steels, Liberty Pressing Solutions, Liberty Steel Distribution and Liberty Steel Dalzell.
First established in 2003, King & King is a little-known auditor, with just two offices – on Baker Street in central London and Wembley in the city’s north west. The firm has audited the accounts of more than 60 of Gupta’s companies, with combined revenues of more than £2.5bn.
A GFG Alliance spokesperson said: “We have parted company with King & King due to overall issues resulting from the collapse of Greensill Capital. We are in the process of appointing new auditors. There is no impact on the operations of any of our businesses.”
“Despite the very challenging operating conditions for steel producers in the UK we have continued to fund the business with over £100m of support provided by the shareholder to Liberty Steel UK since the collapse of Greensill Capital.”
“That support has ensured industrial jobs are preserved in communities across the UK while we finalise a debt restructuring agreement and we appoint a new auditor.”
King & King refused to comment.