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The Bank of England has fined the former chief executive of Sanjeev Gupta’s Wyelands Bank almost £120,000 for “multiple breaches” of regulatory rules in the run-up to the bank’s 2020 implosion.
The BoE’s Prudential Regulation Authority said on Thursday that Iain Mark Hunter, Wyelands’ former chief executive, “failed both to act with due skill, care and diligence, and to take reasonable steps to ensure that Wyelands had adequate systems and controls in relation to the large exposures regime and PRA record keeping requirements”. The banking watchdog’s case turned on events between March 2016 and May 2020.
Wyelands was part of Gupta’s GFG Alliance steel-to-finance conglomerate. At its peak, the bank gathered more than £700mn in deposits from British savers; it was ordered to return them in March 2021 when regulators became concerned about the bank’s financial condition.
The PRA previously described the bank as having been “almost entirely reliant” on customers that were linked to its steel magnate owner, and had already censured Wyelands for “wide-ranging significant regulatory failings” in April last year.
A 2020 Financial Times investigation revealed that Wyelands had channelled depositors’ money into GFG. The biggest backer of the group of companies 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 UK’s Serious Fraud Office is conducting an ongoing criminal investigation into GFG.
The PRA said that as part of the settlement, “Mr Hunter has given an undertaking to the PRA that he will not in the future apply for or perform any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm”.
Hunter remains in his position at GFG, which made him its chief governance officer in May 2021 — the same month the SFO announced its investigation into the group — praising his experience “dealing with a range of governance issues for growth companies and those in more challenged circumstances”.
In this role, Hunter is a board director of Liberty Steel, one of the UK’s largest steelmakers. Hunter, who is based in Dubai, did not respond to a request for comment.
Sam Woods, chief executive of the PRA, said in a statement: “If senior individuals fail to meet the Conduct Rules, as Mr Hunter did, it undermines the trust in financial institutions and the wider financial system.”
“The PRA has taken significant action against Mr Hunter because his management created prudential risks for the firm, threatened its safety and soundness and contributed to the firm’s breaches of a number of PRA rules and regulations.”
The case was resolved after the PRA’s early settlement window closed, which means that Mr Hunter does not qualify for a 30 per cent discount on his fine. The PRA said it had considered Hunter’s residence outside the UK in the settlement, as well as his acceptance of the failings outlined.
Sanctioning the bank last year, the PRA said that while Wyelands’ business plan had been to “originate business from entities introduced by [the GFG], 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”.
GFG said in a statement: “Wyelands Bank’s shareholder has done what it can to support the PRA through this process and notes the PRA’s findings. The shareholder has injected significant funding into Wyelands Bank, so all depositors were repaid in full, ensuring that none of Wyelands depositors suffered losses. The shareholder has also provided funding to ensure Wyelands Bank continued to operate in order to allow the regulatory process to be completed and for the bank to conclude its solvent wind-down.”
