Global accounting giant PwC has been fined £2.9 million by the UK’s Financial Reporting Council (FRC) for serious failures in its audit of Wyelands Bank, which was owned by steel tycoon Sanjeev Gupta. The fine comes after regulators found that PwC failed to properly understand and investigate the bank’s lending practices—an oversight that played a role in the bank’s collapse.
Wyelands Bank, acquired by Gupta in 2016, was meant to support British industry. However, in 2021, the Bank of England’s Prudential Regulation Authority (PRA) shut it down and ordered it to repay customer deposits—worth £727 million—because of concerns about its financial health.
PwC audited the bank’s 2019 accounts and admitted it did not meet several required audit standards. These failures included poor risk assessment, inadequate vetting of loans, and ignoring red flags about related-party transactions. Most of the bank’s business (84%) was linked to Gupta’s group of companies, known as GFG Alliance, but PwC did not properly question the risks of this exposure.
The FRC noted that PwC and its audit partner failed to gather enough evidence to confirm if some loans even existed. When Wyelands Bank refused to disclose key information, PwC did not push back. Additionally, the audit team wrongly recorded that there were no negative news stories about the bank’s owner, even though media reports had raised concerns about transparency at GFG.
Jonathan Hinchliffe, the PwC audit partner responsible, was also fined £33,412 (down from an original £55,000) and reprimanded by the FRC. He resigned from PwC due to the investigation’s impact.
The FRC further criticized PwC for ignoring warnings from the PRA and not checking whether the bank could stay viable. The audit firm, which earned £206,000 for the 2019 audit, resigned from the job later that year, citing a conflict of interest.
PwC acknowledged its mistakes and said it had launched a multiyear program to improve its audit quality since 2019. Due to its cooperation, PwC’s fine was reduced from £4.5 million to £2.9 million.
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