PwC Fined $5.8 million Over 2019 Weylands Bank Audit

According to a statement by FRC spokesperson, the FRC discounted the fine imposed on PwC following exceptional co-operation, admissions and early disposal, reducing the penalty to just under 2.9 million pounds.

“Since 2019 we have undertaken a multi-year programme to enhance audit quality and have, as a result, seen significant changes to our audit practice,” the spokesperson said.

“Recent supervision reports reflect the improvement and investment made in audit quality, which remains our top priority.”

The regulator said the missteps primarily stemmed from PwC’s failure to “properly understand and adequately consider” the risks posed by the lender’s exposure to related parties in the Gupta Family Group Alliance, an unconsolidated group of companies under common ownership, active in the steel, aluminium and renewable energy sectors.

The FRC estimated 84% of Wyelands’ business had been introduced by companies in the GFG Alliance. Its lending activities were largely funded by deposits from retail customers, and it held 727 million pounds in customer deposits from over 15,000 savers at the time of the audit.

The Bank of England forced Wyelands to hand back 210 million pounds of deposits to around 4,000 savers in February 2021 after concerns emerged over how the bank was financing the GFG Alliance. By March 2020, the bank had begun to wind down its business.

“In this audit, the risks around the Bank’s membership of and involvement with the GFG Alliance were not properly recognised and considered, despite clear warnings to the Bank from the PRA, This led to a number of serious failings, which had the potential to adversely affect retail depositors.” Claudia Mortimore, FRC Deputy Executive Counsel, said in a statement.