Sanjeev Gupta’s Wyelands Bank censured by Bank of England for regulatory failings

The Bank of England has censured steel magnate Sanjeev Gupta’s Wyelands Bank for “wide-ranging significant regulatory failings”, although the company avoided an £8.5mn fine as it winds down.

The BoE’s Prudential Regulation Authority said Wyelands’ failings between December 2016 and May 2020 included an over-reliance on companies related to Gupta, capital reporting, governance, risk controls and the failure to properly retain WhatsApp messages.

“Wyelands’ wide-ranging and serious failings resulted in the PRA taking swift supervisory action to minimise the risk to depositors and issuing today’s strong censure,” said Sam Woods, deputy governor for prudential regulation and chief executive of the PRA.

The UK banking regulator said in its statement on Tuesday that while Wyelands’ business plan had been to “originate business from entities introduced by [Gupta Family Group Alliance], with a view to developing third party business over time”, in practice it “was almost entirely reliant on GFG and entities originally introduced by GFG”.

Wyelands is part of the GFG steel-to-finance conglomerate. At its peak, the bank gathered more than £700mn in deposits from British savers.

A Financial Times investigation in 2020 revealed that Wyelands had channelled depositors’ money into Gupta’s wider business empire, using a network of companies controlled by the magnate’s associates often referred to as the “Friends of Sanjeev”. The biggest backer of companies in the alliance was the now-collapsed Greensill Capital.

Gupta, once dubbed the “saviour of steel” for a string of acquisitions across four continents, has been battling to hold together his metals empire since the collapse of Greensill amid allegations of fraud in March 2021.

The PRA also ordered Wyelands to repay customer deposits in March 2021 amid rising concerns over its financial position.

BoE governor Andrew Bailey had revealed that regulators referred Wyelands to the National Crime Agency and Serious Fraud Office in 2021 after probing its “connected lending” related to Gupta, though there have been no charges.

The bank commenced a wind-down of the business in March 2020. In its annual results last year, it announced it had “no viable future” with virtually all of its loans in default.

Wyelands’ chief executive Stephen Rose said on Tuesday that his board “has been committed to working constructively with the PRA throughout its investigation, and welcomes the matter being drawn to a close”.

In its accounts last year, Wyelands disclosed that it was also under investigation by the Financial Conduct Authority. The watchdog declined to comment.

The GFG Alliance said it had “done what it can to support the PRA through this process and notes the PRA’s findings”, adding that it had “injected significant funding” to ensure that depositors did not suffer losses.