Sanjeev Gupta, whose business is in the crosshairs of fraud investigators and struggling to appoint auditors, has turned to a septuagenarian accountant known to many as the father of a British soap-opera star to help draw up his group’s financial statements.
The British metals magnate — whose GFG Alliance has been mired in criminal investigations, insolvency proceedings and high-profile legal disputes — is using the self-employed and semi-retired accountant to help prepare at least some of the conglomerate’s financial statements, according to court documents seen by the Financial Times.
Some unaudited financial statements for two of Gupta’s British businesses have been prepared by Kenneth Tointon, according to a witness statement filed as part of insolvency proceedings brought by HM Revenue & Customs. The UK tax authority accuses the companies of failing to pay hundreds of thousands of pounds worth of tax.
Tointon, who qualified as an accountant in 1977, is the only employee of his firm K Tointon Limited, which is registered to a residential address in North London.
The 76-year-old holds a practising certificate with the Association of Chartered Certified Accountants, which means he is “authorised to provide a range of general accountancy services to individuals and businesses”, such as preparing tax returns and providing book-keeping services. Tointon does not appear to hold any audit qualifications.
Gupta’s new accountant is also the father of Kara Tointon, a former EastEnders actress who won the grand prize on popular ballroom dancing competition Strictly Come Dancing in 2010. Kara has previously told interviewers that she lived in a flat above her father’s accountancy firm in Essex when she was growing up.
Gupta has turned to Tointon as legal scrutiny of the sprawling GFG Alliance group’s accounting practices has stepped up. His businesses’ inability to produce audited accounts is at the heart of two separate sets of legal proceedings from both HMRC and the UK’s corporate registry, while GFG continues to face a wider criminal probe from fraud investigators.
Gupta was once widely hailed as the “saviour of steel” but the 2021 collapse of his conglomerate’s main lender, Greensill Capital, catalysed a slew of legal problems for GFG, including a criminal investigation by the Serious Fraud Office into suspected fraud, fraudulent trading and money laundering. GFG has previously denied wrongdoing and pledged to co-operate with the probe.
The steel magnate is also being prosecuted over his alleged failure to file accounts in the UK for more than 70 companies, the FT reported earlier this month, prompting GFG to claim that it has “finalised unaudited accounts for our UK businesses”. Gupta and four other directors of his companies have pleaded not guilty to the charges in the case, which was brought by Companies House, the UK’s corporate registry.
In the separate insolvency proceedings brought by HMRC against three of Gupta’s British businesses, the companies’ barrister argued at a London high court hearing last month that they were in a “complicated position” that “all stems from being unable to appoint auditors at the moment”.
In a witness statement filed to the high court on behalf of two of these companies, Mark Fry, a senior restructuring adviser at BTG Advisory who is working with GFG, stated that their accounts have been “produced in statutory form . . . save that they have not been audited”.
Fry added that these unaudited financial statements were prepared by Tointon, whom he described as a chartered accountant “with decades of experience”, using “draft accounts” produced by the companies’ management.
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.
Adam Leaver, an accounting professor at the University of Sheffield, said that a statutory set of accounts must include an audit report, unless the company has an exemption.
“If there’s no exemption and no audit report, then the accounts are incomplete,” he said, adding that if a company cannot find an auditor it is “obliged to contact the Secretary of State who may appoint one for them”.
In the past year, Tointon has also replaced Gupta as the sole director of two of GFG’s businesses, Liberty Finance Management (LIG) Ltd and Liberty Commodities Limited. Both companies are subject to winding up petitions — the former from HMRC and the latter from other creditors — and have previously faced allegations of suspected financial impropriety, which GFG has denied.
Tointon’s appointment to these businesses has caught the attention of some of those in dispute with GFG, with one lawyer involved explaining that he was puzzled that the “winner of Strictly Come Dancing’s father” had become a director of Gupta’s companies.
GFG Alliance said: “We appointed Ken Tointon, a third-party qualified accountant, as a restructuring director to some Liberty businesses. In his role he reviewed and formatted internally prepared management accounts into the template required by Companies House.”
GFG added that its directors had “taken all reasonable steps to resolve the situation” around its lack of an auditor, that there were “no underlying issues” with its accounts, and that the group had kept officials at the Department of Business and Trade appraised of the situation.
Tointon declined to comment on his work for Gupta’s businesses when approached at his North London home and did not respond to a subsequent written request for comment.
GFG, which stands for Gupta Family Group, is not a legal entity that files a single set of consolidated accounts. Instead, it comprises scores of separately audited companies, which have often relied on lesser-known accountancy firms to sign off their books.
More than half of the 76 businesses subject to the Companies House action were previously audited by King & King, a small chartered accountancy firm that came under scrutiny for its audits of Gupta’s companies, leading the Financial Reporting Council to launch a probe of the firm in 2022, which is ongoing. King & King resigned as auditor from a raft of GFG’s companies later that year, citing the SFO investigation among other factors.
King & King did not respond to a request seeking comment.
Companies House filings show that the majority of the 76 companies are now more than three years overdue in filing their accounts. Accounts at three of the entities appear to be no longer overdue, however, having been filed in July and August.
Lawrence Grant, a Harrow-based chartered accountancy firm, resigned as auditor of six of these 76 companies in August, having never completed an audit, citing the absence of audited financial statements for the parent company.
Gupta’s lack of audited financial statements for many of his businesses is also at the heart of his dispute with HMRC.
Court documents show that HMRC rejected unaudited accounts that GFG’s advisers tried to submit in its company tax returns, informing them that it was not able to “overlook the statutory requirement to have audited accounts”.
According to Fry’s witness statement to the court, Tointon helped to prepare accounts for two GFG businesses, Liberty Steel Distribution Limited and Liberty Pressing Solutions (Coventry) Limited. Accounts for both ending March 2020 show that no corporation tax is owed to HMRC for the year, according to court copies of accounts, corporate tax returns and computations submitted to HMRC in August.
The two sets of financial statements contain conflicting information regarding their auditor, however.
While Liberty Steel Distribution’s accounts explain that King & King resigned as the company’s auditor in August 2022 — and include a disclaimer that it “awaits to appoint a new auditor” — the Liberty Pressing accounts sent to HMRC in contrast still list the chartered accountancy firm as its auditor. Companies House filings show that King & King resigned from auditing both companies in August 2022.
GFG said that the listing of King & King as auditor in Liberty Pressing’s accounts was “an administrative error which has been corrected”.
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