On Monday, the UK’s Financial Reporting Board (FRC) announced its investigations into the audit firms Saffery Champness and PwC. Investigations are related to the fact that Saffery Champness was the auditor of the fintech startup Greensill Capital, which went bankrupt in March, and PwC – the bank Wyelands Bank, associated with it and owned by Indian billionaire Sanjeev Gupta. Investigations began on June 15, but the FRC only announced them today, June 28.
As a reminder, Greensill Capital went bankrupt in March – one of the most notorious in recent years. The company has been providing short-term advance loans to finance its customers’ supply chains. Her main client was Mr. Gupta’s GFG Alliance, which built his business on the purchase of distressed metallurgical assets. In just a week, Greensill Capital’s business collapsed.
British regulators have accumulated many complaints against audit companies: last summer, the FRC in this regard developed new rules for their work in the country. One of the biggest cases to spark claims was the UK construction company Carillion in 2018, when auditing firms were accused of overlooking the impending collapse of Carillion. In 2019, FRC launched a review against EY following the bankruptcy of Thomas Cook, a travel company audited by EY.
Read more about the bankruptcy of Greensill Capital in the publication of Kommersant “The startup has turned into a melon.”