GFG audit reports to be scrutinized

Liberty and Alvance audits covering parts of 2018, 2019 and 2020 to be investigated by FRC agency.

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May 9, 2022

The United Kingdom’s Financial Reporting Council Ltd. (FRC) has issued a statement identifying specific audit reports tied to metals producer GFG Alliance that will be undergoing review.

The FRC describes itself as entity that regulates auditors, accountants and actuaries. The FRC adds, “We set the U.K.’s Corporate Governance and Stewardship Codes. We promote transparency and integrity in business. Our work is aimed at investors and others who rely on company reports, audit and high-quality risk management.”

An early press notice from the FRC identifies four audit reports by London-based King & King as now being under investigation.

The four reports pertain to 1. the consolidated financial statements of Liberty Speciality Steels Limited for the year ended March 31, 2019; 2. the financial statements of Alvance British Aluminium Limited (formerly Liberty Aluminium Lochaber Ltd) for the year ended March 31, 2019; 3. the financial statements of Liberty Steel Newport Limited for the year ended March 31, 2019; and 4. the financial statements of Liberty Performance Steels Limited for the year ended March 31, 2020.

“The investigations will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure,” the FRC says, adding, “The decisions [to investigate] were made at a meeting of the FRC’s Conduct Committee on Feb. 22, 2022.”

The GFG Alliance was involved in the supply chain financing system that led to the 2021 downfall of the former Greensill Capital. Last May, the U.K.’s Serious Fraud Office (SFO) announced it was “investigating 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 (GFG), including its financing arrangements with Greensill Capital UK Ltd.”