Sanjeev Gupta-owned Dalzell steelworks auditors resigned due to lack of evidence

Auditors of a steelworks that has yet to repay a £7-million taxpayer loan resigned due to a lack of evidence and information at several GFG Alliance companies.

King & King Chartered Accountants, which audited several companies within Sanjeev Gupta’s business empire, including the Dalzell steelworks, resigned on August 17, with new filings demonstrating the disagreement between the auditors and the firms.

In their resignation letter, the auditors state that a “lack of sufficient information and evidence” in connection to several factors had led them to propose a disclaimer on the most recent set of accounts.

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However, the letter states Mr Gupta, the sole director of the four companies involved, “would not accept” such a disclaimer.

A disclaimer of opinion is issued only when an auditor is unable to gather enough evidence to complete its work.

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The areas lacking in information include the ongoing Serious Fraud Office investigation, which was launched following the collapse of GFG Alliance’s main funder, Greensill Capital, last year.

King & King also remain under investigation by the Financial Reporting Council

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International metals and industrials entrepreneur Sanjeev Gupta presented First Minister, Nicola Sturgeon, with a special commemorative medal cast from Lochaber aluminium to mark two years since his group the GFG Alliance began investing in Scottish industry in 2018.

Auditors also highlighted concerns around a lack of information on “the company’s ability to fund its future operations for at least 12 months” and the “recoverability of related party balances”.

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One of the companies involved is the Dalzell steelworks, which were purchased by Mr Gupta’s conglomerate following a back-to-back sale from Tata Steel, during which the Scottish Government purchased the plant for a nominal £1 to facilitate the immediate sale to Liberty Steel.

Its accounts are several years overdue, with the last set of accounts published prior to the pandemic in 2019.

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There also remains outstanding issues relating to a £7m loan from Scottish Enterprise issued in 2017, which remains unpaid.

GFG Alliance said the firm had “parted company” with the auditors due to “overall issues resulting from the collapse of Greensill Capital”.

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King & King also audited the last fully audited accounts of the Lochaber smelter, which received a guarantee worth £586m from the Scottish Government, but has yet to issue a letter of resignation.

The latest accounts for the smelter include auditing fees, but appear unaudited, something described as an “interim step” by GFG Alliance.

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The Scottish Government and Scottish Enterprise were contacted for comment.

All episodes of the brand new limited series podcast, How to be an independent country: Scotland’s Choices, are out now.

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It is available wherever you get your podcasts, including Apple Podcasts and Spotify.

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