The UK’s audit watchdog has launched an investigation into HW Fisher’s audit of Sanjeev Gupta’s metals trading company Liberty Commodities, after eight companies linked to the steel magnate borrowed up to £400m from collapsed firm Greensill Capital.
The Financial Reporting Council (FRC) said it has launched a probe into London accountant HW Fisher’s audit of Liberty Commodities for the financial year ending on 31 March 2020.
Metals trading firm Liberty Commodities was founded by Gupta in 1992, and has grown into a multi-billion-dollar company. Last year, Credit Suisse launched a case to force Liberty Commodities into insolvency.
The investigation comes as British-Indian industrialist Sanjeev Gupta faces scrutiny over ties to Greensill Capital, which filed for insolvency in March last year.
Prior to its collapse, Greensill borrowed as much as £400m from the government-owned British Business Bank (BBB), before lending it to eight different companies linked to Sanjeev Gupta.
Greensill’s collapse could see taxpayers forced to foot a bill worth £335m, according to the National Audit Office (NAO), as it claimed the government-owned BBB only carried out limited due diligence on Greensill’s loans.
The BBB gave Greensill permission to lend out £400m worth of loans, after allowing the financial services company access to business support schemes during Covid.
Greensill, a supply chain finance company, was founded by Australian billionaire Lex Greensill in 2011. Prior to setting up the firm, Greensill had previously worked as a senior advisor to British prime minister David Cameron.
David Cameron later lobbied chancellor of the exchequer Rishi Sunak on Greensill’s behalf, according to reports.
