Bank of England Sanctions Wyelands Bank Owned by Sanjeev Gupta for Regulatory Failures

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Steel magnate Sanjeev Gupta’s Wyelands Bank has been censured by the Bank of England (BoE) for “wide-ranging significant regulatory failings” despite not facing an £8.5mn fine as it winds down.

The Prudential Regulation Authority (PRA) of the BoE commented that Wyelands’ wrongdoings between December 2016 and May 2020 included a dependence on people related to Gupta, capital reporting issues, weak governance, feeble risk controls, and failure to appropriately store WhatsApp messages.

The bank was cited to have based its business plan to “originate business from entities presented by [Gupta Family Group Alliance], with a view to constructing third-party business over time,” given that its operations ended up heavily relies on GFG introductions. Wyelands managed to gather more than £700mn in deposits from British savers prior to its decline.

An investigation by the Financial Times in 2020 jeopardised Wyelands for diverting depositors’ money into Gupta’s money-making network known as the “Friends of Sanjeev”. The main provider to this group of companies from Gupta’s circle was the already-defunct firm Greensill Capital.

Since the Greensill collapse in March 2021 due to questions of misconduct, Gupta has been trying to support his enterprise. As a result, the PRA also imposed an order on Wyelands to pay back customer deposits due to rising concerns with its financial steadiness in March 2021. Currently, the bank is being investigated by the National Crime Agency and Serious Fraud Office, although non charges have been laid.

Wyelands began its halt of operations in March 2020 and issued in its yearly results a statement that it “had no feasible future” come 2021 as almost all loans had gone bad. Its CEO, Stephen Rose, stated in the BoE’s press release on Tuesday that his board “has been devoted to working with the PRA throughout its probe, and appreciates the matter being brought to conclusion”.

The GFG Alliance, of which Wyelands is part of, attested that it gave as much support to the PRA as it could, plus injected substantial funds to make certain that depositors did not suffer from losses.

Beyond the Wyelands Bank PLC, the company has become famous for being home to Sanjeev Gupta, founder and chief executive of Liberty House Group and GFG Alliance. He first entered the metals industry in 2005 when he purchased the Southworks steel mill in the UK. After acquiring other divisions in the steel sector, Gupta effectively earned the title of “saviour of steel” by his commitments to continue making steel in Europe, even when other producers were struggling. Since then he has been recognized as an industrialist, investing in many industrial and financial fields.