Sanjeev Gupta’s Wyelands Bank says it has ‘no viable future’

Wyelands Bank has announced it has ‘no viable future’ and nearly all of its loans are in default, nearly a year after regulators forced Sanjeev’s troubled lender Gupta to return money to British savers.

In its latest annual accounts released on Monday, Wyelands said efforts to find a buyer for the bank had been unsuccessful, meaning it had laid off the “majority of staff” before closing the business. The bank also reported a loss of £116m in the year to April 2021, with more than 90% of its £173m loan portfolio compromised because a ‘high proportion’ of its borrowers “remained in default”.

Gupta, a steel tycoon whose conglomerate GFG Alliance is currently under investigation by the Serious Fraud Office, set up Wyelands Bank in 2016 with the stated aim of supporting British industry. It took in £700million in deposits from UK savers at its peak, but the Prudential Regulation Authority ordered the bank to repay customer deposits in March 2021 amid growing concerns about its financial condition.

It came a year after a Financial Times investigation found Wyelands Bank funneled depositors’ money into Gupta’s wider business empire, using a web of companies controlled by the tycoon’s associates. metals. Gupta employees often referred to these entities as “Friends of Sanjeev”.

Stephen Rose, chief executive of Wyelands, said the bank’s liquidation “is now largely complete. Therefore, we need fewer employees and fewer board members.

“Furthermore, the bank is simplifying its structures to preserve its resources, which is why a number of our senior colleagues have resigned from their board positions. Rachelle Frewer has left the board but remains the bank’s chief financial officer.

GFG Alliance said: “The shareholder supported the bank to ensure a solvency liquidation.”

Wyelands accounts reveal the bank is under investigation by the PRA and Financial Conduct Authority, noting regulators could impose a fine in excess of £3m which the bank said it has to pay it. Andrew Bailey, Governor of the Bank of England, revealed last year that regulators had also referred the bank to the National Crime Agency and the Serious Fraud Office, after probing its “connected loans” linked to Gupta.

Former Wyelands auditor PwC, who resigned at the end of 2019 citing an undisclosed conflict of interest, is under investigation by the Financial Reporting Council.

In an audit letter signed this month, Wyelands’ current auditor, Mazars, noted that the bank had faced “sustained difficulties” in recovering loans from borrowers, “particularly those who are other GFG Alliance companies”.

The annual report revealed that Wyelands chairman John Crompton Frewer and the chairman of its risk committee David Smith resigned from the board this month. Jay Hambro, the scion of a London banking dynasty who was once Gupta’s top lieutenant, resigned from the board in July last year after falling out with the metals mogul.

Murali Subramanian, the former head of trade finance lender FIMBank, replaced Hambro as Gupta’s shareholder representative on the board in September. Subramanian also sits on the board of Banca Romana de Credite si Investitii, a Romanian bank that Sanjeev Gupta acquired in early 2020.

Gupta considered acquiring Italian Aigis Banca in 2020, but did not complete the deal. The small Italian lender then collapsed.

Gupta also held talks with offshore law firm Mossack Fonseca about setting up a bank in Panama two years before regulators allowed him to buy one in the UK.

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