The UK’s accounting watchdog has launched an investigation into four audits carried out by little-known accountancy firm King & King, of firms linked to embattled steel magnate Sanjeev Gupta.
The Financial Reporting Council (FRC) said it would be probing King & King’s audits of financial results posted by four of separate companies linked to Sanjeev Gupta, and his GFG Alliance metals empire.
The probe comes after UK fraud investigators and French police seized documents from multiple addresses linked to Sanjeev Gupta, as part of investigation into allegations of fraud and money laundering.
Gupta has faced mounting scrutiny over the previous year, following revelations the industrialist’s business empire borrowed £400m from collapsed supply chain finance firm Greensill Capital.
The FRC probe will look into King & King’s audits of financial results posted by Liberty Speciality Steels Limited, Alvance British Aluminium Limited, and Liberty Steel Newport Limited, for the financial year ending in March 31 2019.
The FRC said it will also be investigating the accountancy firm’s audit of Liberty Performance Steels Limited for the financial year ending on 31 March 2020.
First established in 2003, King & King is a tiny London based accountancy firm, with offices in Central London, on Baker Street, and in North West London, in Wembley.
Most recently, King & King audited the accounts of more than 60 companies linked to Gupta’s metals empire, with combined revenues of more than £2.5bn.
Although responsible for auditing companies with billions in revenue, the firm only has two ICAEW listed chartered accountants on its books, and one other licensed professional.
As such, it seems that in auditing the accounts of companies linked to Gupta’s GFG Alliance of steel producers, King & King relied heavily on managing partner Milan Patel and partner Subodh Shinde.
The FRC probe comes after the Financial Times reported Gupta had sought to settle a debt with buyout group American Industrial Partners using money taken from an Eastern European steelworks.
City A.M. has approached both King & King and GFG Alliance for comment.