Grant Thornton is facing accusations of a conflict of interest connected to its role as administrator of Greensill Capital, after it emerged the auditor had previously advised the firm’s biggest debtor Sanjeev Gupta on a string of deals.
Grant Thornton was appointed as Greensill’s administrator on Monday after the finance firm collapsed when Credit Suisse froze a $10bn fund.
However the professional services firm reportedly played a central role in growing oil tycoon Gupta’s metals business.
It advised him on deals in Scotland, Wales and France, according to the Sunday Times.
“Prior to accepting our appointment as administrators to Greensill Capital (UK) Limited, we gave careful consideration to the Code of Ethics relating to such matters and satisfied ourselves that there is no threat to our independence as a result of any prior relationships,” a spokesperson for Grant Thornton said.
“Moreover, in line with the administrators’ statutory obligations and standard reporting processes, any relevant prior relationships will be disclosed to creditors in due course.”
Greensill specialises in supply-chain finance providing short-term credit to businesses, which it bundled and sold to financial firms.
On Monday the finance firm appointed Grant Thornton as its administrators, warning it is in “severe financial distress”, but Greensill’s issues have been mounting for some time.
Last year the German regulator Bafin started investigating Greensill’s exposure to steel magnate Sanjeev Gupta after Greensill was hit by a number of its clients defaulting on their debts, including NMC Health.
It meant the finance firm and a group of insurers were forced to cover the losses in funds managed by Credit Suisse.
In Australia Greensill lost a legal battle to get its insurer Bond and Credit Company to extend its insurance beyond 1 March. This led to Credit Suisse suspending redemptions on a $10bn suite of Greensill-linked funds.
It is now liquidating the fund and returning money to investors while Swiss asset manager GAM Holding has also announced the closure of its Greensill-linked funds.