The UK's accountancy watchdog has launched an investigation into the auditor of Greensill Capital, the collapsed financial backer of industrialist Sanjeev Gupta.
The Financial Reporting Council has begun a probe into accountancy firm Saffery Champness.
It also announced an investigation into PwC, which audited financial statements made by Wyelands Bank.
The bank was controlled by Mr Gupta but also lent money to his other firms.
The FRC said it was looking into Saffery Champness's audit of Greensill Capital's financial statements for the year to 31 December 2019.
The supply chain finance company went bust in March, raising concerns over the future of GFG Alliance, the sprawling empire controlled by Mr Gupta and his family which owns the UK's Liberty Steel.
Following the collapse of Greensill, it emerged that the former prime minister David Cameron had unsuccessfully lobbied senior members of the government and former colleagues for loans on behalf of the company.
Greensill's founder, Lex Greensill, was an adviser to the government during Mr Cameron's time as prime minister.
In May, the Serious Fraud Office announced an investigation into "suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance, including its financing arrangements with Greensill Capital".
A spokesman for Saffery Champness said: "As professional accountants we owe a duty of confidentiality to present and former clients and, with this matter the subject of investigation, it would not be appropriate to comment at this time save to say that Saffery Champness will of course be co-operating fully with the FRC."
The FRC said it was also examining PwC "in relation to its audit of the consolidated financial statements of Wyelands Bank for the year ended 30 April 2019".
There is no shortage of official enquiries into the collapse of Greensill Capital and the affairs of one of its main clients, GFG Alliance, the group of companies presided over by the metals tycoon Sanjeev Gupta.
Parliamentary select committees are doing a post mortem on the former, and trying to work out the future of the latter as part of a wider probe of the future of the steel industry.
The Serious Fraud Office is investigating suspected fraud, fraudulent trading and money laundering within GFG, including its relationship with Greensill.
Today's announcements, however, show a new front being opened and a new question asked. How was Greensill able to come so far, and to appear in decent financial health, only to cave in so suddenly? Were its accounts not to be trusted?
The FRC has also begun an inquiry into PwC's auditing of Wyelands Bank, part of the GFG network. Wyelands has been under a shadow for some time. It is expected to be sold or wound up after Mr Gupta said he would not provide any more funding.
If FRC staff are looking for some groundwork for their investigation, they may want to tune into Tuesday's evidence session at the Business, Energy and Industrial Strategy select committee. The first witness before MPs will be Stephen Rose, Wyelands' chief executive.
Mr Gupta bought Wyelands, formerly known as Tungsten Bank, in 2016 for £30m.
Last month, Bank of England governor Andrew Bailey said that in 2019, the Bank's Prudential Regulation Authority banking watchdog had launched an investigation into the business over concerns "connected lending in the context of the ultimate beneficial owner who is Mr Gupta".
He said the Bank notified the National Crime Agency and set out its concerns to the Serious Fraud Office in early 2020.
Earlier this year, the Bank of England forced Wyelands to hand back £210m in deposits to customers.
A spokesman for PwC said: "It's understandable that there is regulatory scrutiny in situations like this. We will co-operate fully with the FRC in its enquiries."
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2021-06-28 09:13:11Z
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