Several large accountancy firms have rebuffed invitations to audit SoftBank-backed Greensill Capital, complicating the controversial financing company’s efforts to appoint a new auditor ahead of a potential stock market listing.
The London-based group, which employs former UK prime minister David Cameron as an adviser, has grown into one of Britain’s most valuable private finance firms since its was founded in 2011. However, for the past five years it has employed the relatively obscure accountancy firm Saffery Champness as its auditor, rather than one of the Big Four firms.
Saffery Champness, which is the UK’s 13th-largest accounting firm by fee income, recently agreed with Greensill that the scale and complexity of its balance sheet had outgrown its services, according to people familiar with the matter.
Both KPMG and rival Deloitte turned down an invitation from Greensill to tender for its audit mandate, citing a conflict of interest, according to people familiar with the matter. Both firms declined to comment. Saffery Champness did not respond to a request for comment.
Challenger audit firm BDO has also declined the role of Greensill’s auditor because of reputational concerns stemming from the company’s involvement in controversies in the asset management industry, according to a person familiar with the matter. BDO declined to comment.
A statement from Greensill said: “Any business reviews its suppliers as they grow and their needs change. Greensill keeps these arrangements under review based on both value and expertise, and we undertake a competitive selection process for any new partners as needed.”
Greensill’s pitch to prospective auditors has centred on its preparation for an initial public offering, which could see it become one of the UK’s most valuable listed speciality finance firms. The company, which helps businesses raise money from their customer and supplier invoices, was valued at about $3.5bn in its latest private funding round by SoftBank Vision Fund a year ago.
SoftBank executives pressed Greensill to change its auditor to a larger and better-known firm, according to people familiar with the matter, having recently presented its portfolio company with a November deadline to appoint a new accounting firm.
Over the past year, the Japanese technology conglomerate has also pushed Greensill to reduce its exposure to businesses connected to Sanjeev Gupta, the British steel magnate whose GFG Alliance conglomerate has heavily relied on funding from the private finance firm.
SoftBank declined to comment.
A German bank owned by Greensill has been probed by the country’s financial regulator, BaFin, over its level of exposure to companies connected to GFG, Bloomberg first reported.
Financing that Greensill arranged for Mr Gupta was at the heart of a scandal in the Swiss asset management industry. In 2018, Zurich-based GAM was forced to liquidate a fund that had invested in illiquid bonds that the London-based finance firm had arranged for Mr Gupta’s companies.
The Financial Times reported earlier this month that Greensill Capital has provided tens of millions of pounds of UK government-guaranteed loans to two companies associated with Mr Gupta that employ just 11 people.
Mr Gupta has a close relationship with Greensill’s founder Lex Greensill, and the India-born industrialist briefly held an equity stake in Greensill Capital in 2016.
Get alerts on Financial services when a new story is published