King & King, the auditor for Sanjeev Gupta's GFG Alliance, faces significant penalties from the UK accounting watchdog for what were described as "egregious" audit failures. The Financial Reporting Council (FRC) fined King & King 280,000 pounds (approximately $358,000) and banned its sole active partner, Bikesh Gupta (no relation to Sanjeev Gupta), from the profession for two years. This represents a substantial blow to the small audit firm, which had been responsible for auditing a significant portion of Sanjeev Gupta's sprawling metals and energy empire.
The investigations by the FRC focused on the audits of four specific GFG Alliance companies: Liberty Speciality Steels Limited, Alvance British Aluminium Limited, Liberty Steel Newport Limited, and Liberty Performance Steels Limited. The audits under scrutiny covered financial years ending in March 2019 and March 2020. The FRC had previously confirmed these investigations in May 2022, emphasizing that the probes were into King & King's audit practices and did not directly implicate GFG entities or individuals, according to a GFG Alliance statement at the time.
This incident is not the only audit-related issue surrounding Sanjeev Gupta's business interests. Separately, PwC was fined 4.5 million pounds (approximately $5.75 million) by the FRC for its inadequate audits of Wyelands Bank, which was also owned by Gupta's GFG Alliance. This pattern of audit failures highlights persistent concerns about financial oversight within the GFG Alliance structure, especially in the wake of the collapse of Greensill Capital, a key financier for Gupta's businesses.
