The UK’s Financial Reporting Council (FRC) has levied a £4.5 million fine against PricewaterhouseCoopers (PwC) for serious deficiencies in its 2019 audit of Wyelands Bank. The penalty reflects ongoing regulatory scrutiny of audit firms and reinforces the FRC’s push to uphold high standards of transparency and accountability within the financial sector.
Wyelands Bank, founded in 2016 by steel tycoon Sanjeev Gupta as part of the Gupta Family Group (GFG) Alliance, was intended to support British industrial growth. However, by early 2020, the bank began winding down operations amid concerns over its financial stability. In 2021, the Bank of England ordered Wyelands to return £210 million in customer deposits due to questions surrounding its exposure to related entities within the GFG network.
The FRC’s investigation revealed multiple failings in PwC’s audit process. These included insufficient risk assessments, inadequate scrutiny of related-party transactions, and poor evaluation of regulatory compliance. Critically, the audit failed to properly address the fact that 84% of Wyelands’ business was referred by companies within the GFG Alliance—raising red flags that were not adequately investigated or disclosed.
Jonathan Hinchliffe, the lead audit partner for the engagement, was personally fined £55,000. However, both PwC and Hinchliffe received reduced penalties—£2.9 million and £33,500, respectively—after cooperating with the investigation and admitting to the breaches. The admissions allowed for leniency, but the case still raises serious concerns about audit oversight in complex corporate structures.
In a statement, PwC acknowledged that the 2019 audit fell short of professional standards. The firm emphasized that it has since launched a multi-year initiative to improve audit quality across its practice. “We are focused on ensuring consistent delivery of high-quality audits and continue to invest significantly in our audit capabilities,” a spokesperson said.
The enforcement action serves as a sharp reminder of the responsibility that auditors bear in ensuring accurate and reliable financial reporting—especially when dealing with organizations tied to intricate ownership structures. As financial watchdogs maintain pressure on the Big Four accounting firms, cases like this underscore the importance of independent judgment, professional skepticism, and regulatory vigilance.
