UK regulators have launched an investigation into the accountancy firm responsible for signing off the accounts for Sanjeev Gupta’s steel companies.
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.
Questions have since been posed of the little-known, two-partner boutique audit firm with two offices in London.
The firm audited the most recent accounts of more than 60 of GFG Alliance's companies in the UK, with combined revenues of around £2.5bn.
It was reported last year that Companies House filings revealed that King and King was paid approximately £1.1m for auditing more than £1.4bn of revenue generated by Gupta’s companies.
With King and King Limited being listed as dormant on the government website it not required to disclose an income statement.
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 its parent group.
The FRC said it would be combing through accounts relating to Liberty Speciality Steels, Alvance British Aluminium - formerly Liberty Aluminium Lochaber - and Liberty Steel Newport, for the year ended 31 March 2019.
It will also look at Liberty Performance Steels statements for the year ended 31 March 2020.
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 supply chain finance services offered by Greensill, meaning that if GFG sold a product to a different company, it could send the invoice 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, but how Greensill and GFG did business together is now being investigated.
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free.
