Wyelands “extremely unlikely” to find a buyer, says bank chief
Wyelands Bank, the lender owned by pressurized metals tycoon Sanjeev Gupta, is “extremely unlikely” to find a buyer after Gupta refused to pump more money into the company, according to its chief executive.
Stephen Rose told MPs on the Business, Energy and Industrial Strategy Committee on Tuesday that the bank was in talks with potential buyers to acquire some of Wyelands’ intangibles and employees, but said: “I don’t think the bank is legal entity of the bank will have a future.
Rose, who joined Wyelands as deputy managing director in 2019 and took over as CEO last November, said there had been “flaws” in the way the bank’s former management team assessed how different borrowers relate to each other and to its owner.
At its peak, Wyelands collected over Â£ 700million in deposits from UK savers, which were mostly loaned to companies with links to the GFG Alliance, Gupta’s loose collection of family businesses. The biggest funder of the alliance companies was the collapse of Greensill Capital.
However, problems with many borrowers led Wyelands to start reducing its balance sheet in early 2020, and in March of this year the Bank of England ordered it to immediately return money to all of its savers.
Rose said the bank was already repaying savers as their accounts matured, but the BoE Prudential Regulator urged a faster solution amid concerns about the potential ‘contagion’ of the collapse of Greensill.
Wyelands said last month that Gupta refused to invest more money in the bank to fund a new strategy. Rose said on Tuesday that following the Greensill collapse, Gupta had âmuch higher priorities. . . than to provide additional funds to revive the bank â, and underlined the thousands of jobs at stake in the steel companies of Gupta.
Wyelands’ accounts were audited by PwC until last year, when he resigned citing a conflict of interest. Rose said the conflict was due to PwC pursuing other business with the GFG Alliance. The UK accounting regulator said on Monday it was investigating PwC’s 2019 audit of Wyelands.
Mazars took up his duties as auditor in 2020 and gave a significantly higher assessment of the level of transactions with the bank’s related parties.
Wyelands is also surveyed by the National Crime Agency and the Serious Fraud Office. Rose said on Tuesday that he could not make any comments that could interfere with an investigation, but noted that he had so far had no contact from the NCA.
Milan Patel, a partner at King & King, the small accounting firm that audits dozens of Gupta companies, appeared separately before the committee. He declined to answer questions about GFG Alliance, citing a letter from his lawyers on June 25 urging him not to disclose confidential information about his clients.