Audit firm to Gupta metals empire fined and banned for ‘egregious’ failures

The UK’s accounting watchdog has fined and temporarily banned a tiny audit firm for “egregious” failures and “widespread deficiencies” linked to its work in signing off accounts of several companies in Sanjeev Gupta’s metals empire. King & King and its managing partner Milankumar Patel have been fined a total of £378,184, received a “severe reprimand”, and hit with serious restrictions on audit work after a four-year investigation by the Financial Reporting Council (FRC). The watchdog said the six-partner firm had “failed to identify clear self-interest” when it conducted more than 140 audits of companies that were part of the the metals tycoon’s GFG Alliance between 2018 and 2020, including Liberty Specialty Steels, Alvance British Aluminium, Liberty Steel Newport and Liberty Performance Steels. King & King, whose main office is based above a row of shops in London’s Regent Street, relied heavily on fees from GFG Alliance companies, which made up nearly 41% of its revenues in 2021. “This led Mr Patel and King & King to take a flawed and artificial approach to the ethical standards, resulting in pervasive breaches across all audits,” the FRC said. …