The investigation into Wyelands, the retail bank owned by metallurgical contractor Sanjeev Gupta, involved the National Crime Agency as well as the Serious Fraud Office, the Governor of the Bank of England has revealed.

Gupta, owner of Liberty Steel, is fighting to keep his GFG Alliance business empire afloat after the collapse of Greensill Capital, the supply chain finance company that has fueled its acquisition frenzy.

The OFS announced two weeks ago that it had opened an investigation into suspicions of fraud and money laundering at GFG.

Andrew Bailey, governor of the BoE, said on Monday that the OFS had started examining the Wyelands after concerns emerged at the end of 2018.

The Prudential Regulatory Authority has started investigating concerns about “connected loans in the context of the ultimate beneficial owner who is Mr. Gupta,” Bailey told the House of Commons Treasury Select Committee.

As a result of this initial work, the PRA in September 2019 imposed restrictions on Wyelands to prevent new lending transactions with “certain parties”, while limiting the bank’s ability to accept deposits.

These restrictions were then tightened five times over the next 18 months, the governor said.

Bailey revealed that new concerns emerged about the Wyelands in October or November 2019, leading to a new phase of investigations, with the National Crime Agency being made aware of these concerns.

After various inquiries – “some were obvious, some were not” – the PRA expressed its concerns to the OFS.

Wyelands announced earlier this month that it was to be sold or liquidated, after its accounts revealed that repayments of 80% of its loan portfolio were overdue. The BoE ordered the bank to repay customer deposits in March.

The Financial Times revealed in 2019 that much of the Wyelands’ loan portfolio was tied to Gupta’s broader business empire.

In 2020, the FT reported that these related party loans were channeled through a network of companies controlled by the partners of the metal tycoon, whom Gupta employees referred to as “Friends of Sanjeev.”

In accounts filed earlier this month, Wyelands’ auditor Mazars pointed out “control weaknesses in identifying related party transactions.” The bank reported losses of £ 69.5million for the year through April 2020.

Gupta championed Wyelands’ role as a provider of capital to small and medium-sized manufacturers after acquiring it in 2016.

The fallout from the Greensill Capital collapse continues to demand financial causation, with Italy’s Aigis Banca collapsing over the weekend due to exposure linked to the UK finance company and GFG Alliance.

Gupta had considered buying a stake in the Italian bank last year, as control of the Wyelands intensified.

Officials at German regulator BaFin said they shut down Bremen-based Greensill bank Greensill Bank in March after it “was unable to provide evidence of the existence of debts on its balance sheet. had bought from the GFG Alliance ”. The regulator has also filed a criminal complaint against the management of Greensill Bank.

Bailey said the PRA determined in February 2020 that Wyelands had failed to meet “clearance thresholds,” in which case the board came forward with “solvent liquidation” proposals.

The PRA agreed to the board’s plan to gradually inject money into the bank to match its deposit book, via loans and a subordinated loan from Gupta.

The ANC did not immediately respond to a request for comment. GFG declined to comment on the matter.