Steel magnate Sanjeev Gupta prosecuted over failure to file accounts

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Steel magnate Sanjeev Gupta is being prosecuted over his alleged failure to file accounts in the UK for more than 70 companies, adding to a list of legal woes faced by the industrialist.

Gupta is fighting multiple charges of failing to deliver copies of accounts to Companies House, the UK’s corporate registry, according to court documents seen by the Financial Times.

The charges relate to 76 companies including Liberty Commodities, the trading firm founded by Gupta in the 1990s, and a number of businesses comprising his Liberty Steel group of metals plants.

Gupta, 53, pleaded not guilty to the charges at Cardiff Magistrates’ Court in March, according to the documents. A conviction for failing to file company accounts can result in a fine and director disqualification.

Companies House said: “We can confirm we are taking enforcement action. However, we are unable to comment further at this time.”

Gupta, a British commodities trader-turned-industrialist, began buying up ailing metal plants around the world a decade ago, winning praise from politicians and becoming widely hailed as the “saviour of steel” for his apparent desire to invest in an unloved industry.

His GFG Alliance group of companies claimed to employ 35,000 people at its peak, at its steel mills and other industrial businesses stretching from the UK to Australia, but the conglomerate came under serious financial pressure after its main lender, Greensill Capital, collapsed in 2021.

The Serious Fraud Office opened a criminal investigation into suspected fraud, fraudulent trading and money laundering at GFG shortly after Greensill’s collapse. No charges have been filed as part of that investigation, which the SFO confirmed is ongoing. GFG has previously denied wrongdoing and has pledged to “co-operate fully” with the SFO.

Four other directors — Iain Hunter, Deepak Sogani, Jeffrey Kabel and Jeffrey Stein — are also being prosecuted by Companies House in relation to the alleged failure to file accounts for the Gupta companies. All of the defendants have pleaded not guilty to the charges.

Hunter, 54, is the former chief executive of Gupta’s Wyelands Bank. Hunter, Sogani, Kabel and Stein joined the boards of Liberty Steel and its related businesses in May 2021, with the metals group describing them as “specialist board directors”, who would help it navigate the collapse of Greensill Capital.

A GFG Alliance spokesperson said on behalf of all five directors: “There are no underlying issues with our accounts and directors have taken all reasonable steps to resolve the situation.

“We have finalised unaudited accounts for our UK businesses and have been in regular communication with Companies House. This legal process has no effect on any of our operations.”

GFG has long faced scrutiny for its accounting practices and financial transparency, even before the SFO began its investigation in 2021.

GFG, which stands for Gupta Family Group, is not a legal entity that files a single set of consolidated accounts. The group instead comprises hundreds of separately audited companies, many of which have different end-of-year dates, making it hard to get a clear snapshot of the overall group.

Gupta pledged to produce consolidated accounts for GFG’s steel business in 2019 but later blamed delays in producing these financial statements on the coronavirus pandemic.

HM Revenue & Customs has this year separately filed petitions to wind up three of the businesses at the centre of the Companies House action over allegedly unpaid tax.

At a hearing last month, a barrister acting for these GFG companies said that the businesses were in a “complicated position” that “all stems from being unable to appoint auditors at the moment”.

Evidence submitted to London’s High Court shows that HMRC rejected unaudited accounts that GFG’s advisers tried to submit in its company tax returns, noting that they did not meet the filing obligation as they were “not signed off by an auditor”.

GFG has disputed the debt HMRC has claimed is owed and is challenging the winding up petitions, which have been adjourned until a further hearing next month.

The next hearing in the Companies House case is scheduled for January 2025.