Sanjeev Gupta, whose affairs are in the crosshairs of fraud investigators and who is struggling to appoint accountants, has turned to a septuagenarian accountant known to many as the father of a British soap opera star to help draw up of his group’s financial statements.
The British metals magnate – whose GFG Alliance is embroiled in criminal investigations, insolvency proceedings and high-profile legal disputes – used the self-employed and semi-retired accountant to prepare at least part of the conglomerate’s financial statements, the court heard. documents seen by the Financial Times.
Some unaudited financial statements for two of Gupta’s British companies were prepared by Kenneth Tointon, according to a witness statement filed as part of insolvency proceedings brought by HM Revenue & Customs. The British tax authorities accuse the companies of failing to pay hundreds of thousands of pounds in tax.
Tointon, who qualified as an accountant in 1977, is the sole employee of his firm K Tointon Limited, which is based at a residential address in north London.
The 76-year-old has a practicing certificate from the Association of Chartered Certified Accountants, which means he is “authorized to provide a range of general accountancy services to individuals and businesses,” such as preparing tax returns and providing bookkeeping services. Tointon does not appear to have any audit qualifications.
Gupta’s new accountant is also the father of Kara Tointon, a former EastEnders actress who won the top prize at a popular ballroom dancing competition Come dance strictly in 2010. Kara has previously told interviewers that growing up she lived in a flat above her father’s accountancy firm in Essex.
Gupta has turned to Tointon as legal scrutiny of the sprawling GFG Alliance group’s accounting practices has been stepped up. The failure of its companies to produce audited accounts is at the heart of two separate legal proceedings from both HMRC and the UK Companies Register, while GFG continues to face a wider criminal investigation from fraud investigators.
Gupta was once widely hailed as the ‘savior of steel’, but the 2021 collapse of his conglomerate’s main lender, Greensill Capital, caused a slew of legal problems for GFG, including a criminal investigation by the Serious Fraud Office into suspected fraud , fraudulent trading and money laundering. GFG has previously denied wrongdoing and promised to cooperate with the investigation.
The steel magnate is also being prosecuted over his alleged failure to file accounts in Britain for more than 70 companies, the FT reported earlier this month, prompting GFG to claim it has “completed unaudited accounts for our UK companies ”. Gupta and four other directors of his companies have pleaded not guilty to charges in the case, which was brought by Companies House, the British company registry.
In the separate insolvency proceedings brought by HMRC against three of Gupta’s British companies, the companies’ lawyer argued at a hearing at the High Court in London last month that they were in a “complicated position” that “all stems from the fact that they cannot appoint accountants at this time. ”.
In a witness statement submitted to the High Court on behalf of two of these companies, Mark Fry, a senior restructuring adviser at BTG Advisory who works with GFG, said their accounts “are prepared in statutory form. . . except that they have not been checked”.
Fry added that these unaudited financial statements were prepared by Tointon, who he described as a chartered accountant “with decades of experience”, using “draft accounts” prepared by the companies’ management.
GFG has disputed the debt it says HMRC is owed and is contesting the winding-up applications, which have been adjourned until a further hearing next month.
Adam Leaver, professor of accounting at the University of Sheffield, said statutory accounts must include an audit report unless the company has an exemption.
“If there is no exemption and no audit report, then the accounts are incomplete,” he said, adding that if a company cannot find an auditor, it is “obligatory to contact the Secretary of State, who will arrange one for can name them”.
In the past year, Tointon has also replaced Gupta as sole director of two of GFG’s businesses, Liberty Finance Management (LIG) Ltd and Liberty Commodities Limited. Both companies are subject to winding-up petitions – the former from HMRC and the latter from other creditors – and have previously faced allegations of suspected financial impropriety, which GFG has denied.
Tointon’s appointment to these companies has attracted the attention of some of those in dispute with GFG, with one lawyer involved explaining that he was surprised that the “winner of Come dance strictly‘s father” had become director of Gupta’s companies.
GFG Alliance said: “We have appointed Ken Tointon, an external qualified accountant, as restructuring director for a number of Liberty businesses. In his role he reviewed and formatted the internally prepared management accounts into the template required by Companies House.”
GFG added that its directors had “taken all reasonable steps to resolve the situation” surrounding the lack of an accountant, that there were “no underlying issues” with the accounts, and that the group of officials from the Ministry of Business and had kept Handel informed. of the situation.
Tointon declined to comment on his work for Gupta’s companies when approached at his north London home and did not respond to a subsequent written request for comment.
GFG, which stands for Gupta Family Group, is not a legal entity that files a single set of consolidated accounts. Instead, it consists of dozens of separately audited companies, often relying on lesser-known accounting firms to sign off on their books.
More than half of the 76 companies included in the Companies House action were previously audited by King & King, a small accounting firm that came under scrutiny for its audits of Gupta’s companies, leading to the Financial Reporting Council launched an investigation into the company. 2022, which is still ongoing. King & King resigned as auditors of a large number of GFG companies later that year, citing, among other things, the SFO investigation.
King & King did not respond to a request for comment.
Companies House documents show that the majority of 76 companies are now more than three years late in filing their accounts. However, the accounts at three of the entities no longer appear to be late as they were submitted in July and August.
Lawrence Grant, a Harrow-based accounting firm, resigned as auditor of six of these 76 companies in August after never completing an audit, citing the parent company’s lack of audited financial statements.
Gupta’s lack of audited financial statements for many of his companies is also at the heart of his dispute with HMRC.
Court documents reveal that HMRC rejected unaudited accounts that GFG’s advisers attempted to submit in its corporate tax returns, telling them it was unable to “overlook the legal requirement to overlook audited accounts”.
According to Fry’s testimony in court, Tointon helped prepare the accounts for two GFG companies, Liberty Steel Distribution Limited and Liberty Pressing Solutions (Coventry) Limited. The accounts for both ending March 2020 show no corporation tax is due to HMRC for the year, according to court copies of accounts, corporation tax returns and calculations filed with HMRC in August.
However, the two sets of financial statements contain conflicting information about their accountant.
While Liberty Steel Distribution’s accounts explain that King & King resigned as the company’s accountant in August 2022 – and include a disclaimer that it is ‘awaiting the appointment of a new accountant’ – Liberty Pressing’s accounts state that it is HMRC, the chartered accountancy firm still remains as its accountant. Companies House documents show King & King resigned from control of both companies in August 2022.
GFG said the listing of King & King as accountant in Liberty Pressing’s accounts was “an administrative error which has been corrected”.