(Adds detail on capital, audit watchdog)
By Huw Jones
LONDON, April 4 (Reuters) - The Bank of England said on
Tuesday it was censuring Wyelands Bank Plc - part of the Gupta
Family Group (GFG) Alliance - for what it said were
"wide-ranging significant regulatory failures" between December
2016 and May 2020.
Wyelands was part of Sanjeev Gupta's metals-to-finance GFG
empire, the largest client of Greensill Capital, the financing
company that went bust in 2021 after one of its main insurers
declined to renew its cover.
Wyelands said it cooperated extensively with the BoE's
investigation and welcomed the matter being drawn to a close.
"The bank is currently in an inactive state, and the board
continues to work to successfully complete the final stages of
its solvent wind down process," Wyelands said.
A GFG spokesperson said GFG injected significant funding
into Wyelands so that all depositors were repaid in full, and to
allow the bank to conclude its solvent wind down.
The BoE's Prudential Regulation Authority (PRA), which
regulates banks, said the breaches related to limits on large
exposures, capital reporting, governance, risk controls and poor
retention of WhatsApp messages.
Wyelands failed to identify that certain amounts it had
received as capital had been indirectly funded by itself, the
PRA said.
"Wyelands entered into several complex structured finance
transactions which were introduced to it by GFG. These
transactions were significantly in excess of regulatory limits
on large exposures, but Wyelands did not identify this and
report it to the PRA," the BoE said in a statement.
The BoE said that under normal circumstances it would have
fined the bank 8.5 million pounds ($10.6 million), but would not
do so given the bank was being wound down and had very limited
financial resources.
In March 2021, the PRA required Wyelands to repay its
depositors, which has been done, the PRA said.
Wyelands said it repaid depositors by May 2021.
The Financial Reporting Council, Britain's accounting
watchdog, also opened an investigation into auditing of Wyelands
bank, said its probe is ongoing and declined to comment on the
Bank of England's findings.
($1 = 0.8018 pounds)
(Reporting by David Milliken and Huw Jones, Editing by Kylie
MacLellan, Kirsten Donovan, Barbara Lewis)
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