Niall Hearty of financial crime specialists Rahman Ravelli considers the issues facing the Indian-born tycoon.

The UK's accounting regulator is investigating the auditing of a metals trading company owned by steel tycoon Sanjeev Gupta's family conglomerate, Gupta Family Group Alliance.

The Financial Reporting Council (FRC) announced that it has begun an investigation into accounting firm HW Fisher's audit of Liberty Commodities for the year 2019.

The FRC has not yet provided any exact details about the nature of its investigation. It has said the decision to commence the investigation was made after a meeting of its conduct committee in January.

The FRC's announcement comes nine months after the UK's Serious Fraud Office said it is investigating the Gupta Family Group Alliance (GFG Alliance) over suspected fraudulent trading and money laundering.

The SFO is examining GFG Alliance's financing and conduct, including its relationship with controversial collapsed financial services company Greensill Capital. Before its collapse in March last year, Greensill is reported to have given billions of pounds of credit to GFG Alliance companies.

Greensill's activities are being investigated by the UK's Financial Conduct Authority as well as authorities in Australia, Germany and Switzerland. Former UK Prime Minister David Cameron has denied any wrongdoing when lobbying government ministers to grant emergency loans to Greensill.

The FRC's announcement comes at a difficult time for the GFG Alliance. While it remains under investigation by the SFO, another of its auditors, King and King, has faced criticisms by MP's who have called for greater scrutiny of its auditing of GFG companies

Plans are afoot to overhaul the regulation of UK auditors and boardrooms following a series of corporate collapses and accounting failures, including the café chain Patisserie Valerie and outsourcer Carillion. There have also been calls to replace the FRC with a new watchdog with a bigger bite, called the Audit, Reporting and Governance Authority

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