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Australia’s markets regulator has suspended a Sydney-based auditor for two years over his “failure” in auditing the financial statements of Greensill Capital and its subsidiaries.
The suspension is the latest fallout from the collapse of Greensill, the supply chain financing group enmeshed in a political and financial scandal. The role auditors played in the March 2021 bankruptcy has been the subject of significant regulatory scrutiny.
The Australian Securities and Investments Commission said on Friday that Joseph Santangelo, a partner at Nexia Australia, had been suspended until June 2026 and would have to pay A$375,000 ($239,000) to cover the regulator’s costs. Nexia International is a global network of more than 250 firms.
Santangelo “failed to carry out or perform adequately and properly the duties of an auditor” in conducting the audits of Greensill and its subsidiaries, said the Companies Auditors Disciplinary Board (CADB), an independent tribunal.
The board had reviewed Santangelo’s work on Greensill’s accounts for the years ending in December 2018 and December 2019.
The UK accounting regulator opened an investigation into Saffery Champness — a firm which is also part of the Nexia network — in 2021 over its Greensill Capital work but has yet to report its findings.
The regulator also opened a probe into PwC’s audit of Wyelands Bank, which is owned by Sanjeev Gupta, the steel magnate that was one of Greensill’s biggest customers. King & King, the small audit firm that signed off the accounts of many of Gupta’s other companies, is also being investigated in the UK.
In 2023, the Australian regulator asked the CADB to consider whether Santangelo’s work on accounts filed by Greensill had been conducted in accordance with Australian auditing standards.
Santangelo was the lead auditor and engagement partner on the consolidated accounts, which comprised about 40 entities including Greensill Capital and Greensill Bank.
The board said Santangelo had failed to design and implement responses to address “significant risks of material misstatement of the group financial report” and had also failed to communicate such risks to other auditors. The board said he also “failed to apply sufficient professional scepticism” when evaluating the work of other auditors.
However, the board “did not contend that there was any material misstatement in the relevant financial statements of the Greensill Group or that Mr Santangelo engaged in any dishonesty or deliberate impropriety”.
Santangelo co-operated with the investigation and accepted its findings, said the regulator.
He did not respond to a request for comment.
Andrew Hoffman, Nexia Sydney’s managing partner, said it accepted the findings of the ASIC.
“We engaged an external expert to review our quality control processes and audit engagements with a focus on the matters identified by CADB. We have implemented the recommendations from these reviews and remain focused on delivering high-quality audit engagements,” he said in a statement.
The ASIC said in a statement that “auditor misconduct” would remain an enforcement priority for the regulator in 2025.
“Auditors are a critical part of the governance framework and are in a unique position to identify and limit misconduct,” said the ASIC deputy chair Sarah Court. “The failure of auditors to meet the standards required of them can have serious consequences for investors and erode confidence in the integrity of Australia’s capital markets.”
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