Two accountancy firms including PWC, one of the so-called Big Four accountancy giants, are under investigation over their audit of Wyeland Banks and Greensill Capital.
Asset financier Greensill, which boasted former PM David Cameron as one of its ambassadors, collapsed in March after its financial backers withdrew their support.
The audit industry regulator, the Financial Reporting Council, said PwC is being looked at in relation to its audit of Wyelands Bank for the year ended 30 April 2019.
Wyelands was the banker to Sanjeev Gupta’s GFG Alliance, which was Greensill Capital’s largest client and sparked the business’s collapse when it started to default on repayments.
The bank was ordered by the Bank of England to hand back GBP210mln of savers’ deposits earlier this year following concerns over its links to GFG.
Accountancy firm Saffery Champness is also under investigation for its audit of Greensill Capital (UK) Limited for the year to end December 2019.
PwC said it was understandable that there is regulatory scrutiny in “situations like this,” it told Reuters.
“We will cooperate fully with the FRC in its enquiries. We share the FRC’s commitment to audit quality and are two years into a wide-ranging programme to enhance audit quality across the firm,” PwC said in a statement.
“Audit quality is an absolute priority for Saffery Champness and we are committed to upholding the high professional standards our clients rightly expect,” Saffery said in its statement.
GFG says restructuring will repay creditors
GFG Alliance, meanwhile, said on Monday it was progressing with a major restructuring that would allow it to pay back its creditors.
“This, in turn, will allow GFG to refocus its business, protect jobs and develop further its remaining assets,” it said in a statement.
A framework with Greensill’s administrators for “positive direct engagement to achieve an amicable resolution” has been agreed, it said.