Britain’s accounting watchdog has opened four investigations into the audits of four companies owned by the metals tycoon Sanjeev Gupta under the Liberty Steel banner. The Financial Reporting Council said it had started investigating the statutory audits of the businesses by the firm King & King. The move follows a call from MPs for the FRC to refer the auditors for investigation. Liberty Steel has been facing growing troubles since its key financial backer, Greensill Capital, collapsed in March 2021, sparking an ongoing attempt for it to find new lenders. Gupta controls Liberty Steel through GFG Alliance, an informal group of metals and energy companies that employs as many as 35,000 people worldwide, including about 3,000 in UK steel. His main British assets are a series of steel plants under the Liberty Steel name, including large operations at Rotherham and Stocksbridge in South Yorkshire and smaller facilities in Wales and the Midlands, as well as an aluminium smelter in Scotland. A scathing report by a group of MPs into Gupta and his metals empire released last November flagged several areas of concern, including Liberty Steel’s audits. They also called on Gupta to be investigated for potential breaches of his duties as a company director. The MPs on the business select committee said they had found “weaknesses in audit”, adding that frequent changes of auditors and accounting deadlines represented “red flags”. The committee’s report found that the small audit firm King & King had “a lack of capacity to complete audits effectively”. Milan Patel, a partner at King & King, previously told the committee his organisation was capable of auditing an organisation of GFG’s size and said the firm had “many clients who have hundreds of millions of pounds of turnover”. The new FRC investigation relates to the audits of the financial statements of the companies: Liberty Special Steels Limited, Alvance British Aluminium Limited (formerly known as Liberty Aluminium Lochaber Ltd), and Liberty Steel Newport Limited for the year to 31 March 2019, as well as the audit of Liberty Performance Steels Limited for the year to 31 March 2020. King & King has been approached for comment. A GFG spokesman said that none of the alliance’s entities or individuals were the subjects of the FRC investigation, adding: “We recognise the importance of strong audit practices and have been evolving our corporate structure and governance as we continue our efforts to restructure and refinance our portfolio.” Concerns have been raised for some time over the corporate governance of GFG. The UK government rejected the company’s request for a £170m bailout after the collapse of Greensill Capital, the supply chain finance firm that employed former prime minister David Cameron. It is understood ministers had concerns over its opaque corporate structure and the possibility of money moving abroad. Transfers between the various GFG companies have come under scrutiny. The Financial Times reported on Wednesday that a key company in the heart of Gupta’s operations, Liberty Finance Management, received €84m (£71m) from GFG’s Liberty Ostrava steelworks on 15 July, the same day it made an attempted debt repayment of $81m (£65m) related to a French aluminium smelter. A GFG Alliance spokesperson said inter-company transfers were “always approved and recorded in accordance with local law and appropriate legal advice”, and that they would be “transparently disclosed in the annual accounts which are audited by the companies’ local auditors”. Last week, investigators from the Serious Fraud Office (SFO) requested documents and questioned executives at the UK offices of companies owned by Gupta. The SFO is investigating “suspected fraud, fraudulent trading and money laundering” in relation to GFG and Greensill Capital. A spokesperson for GFG declined to comment at the time. It came after French prosecutors raided the Paris offices of GFG Alliance as part of an investigation into allegations of “misuse of corporate assets” and money laundering. Gupta’s company said after the raids: “We strongly reject any suggestion of wrongdoing and we will continue to cooperate fully with the French authorities to help them bring this matter to a swift conclusion.”