Regulatory Ripples: Wyelands Bank's Executive Faces £120,000 Fine

GFG Alliance
GFG AllianceImage Source: MSN

Synopsis:

The Bank of England levies a hefty fine of nearly £120,000 on Iain Mark Hunter, the former CEO of Wyelands Bank, a key player in Sanjeev Gupta's GFG Alliance, reports Financial Times. The penalties stem from "multiple breaches" of regulatory rules leading up to the bank's 2020 collapse. With links to Gupta's steel-to-finance empire and a history of regulatory failings, this development unveils a turbulent chapter in the intersection of finance and industry.

 

Article:

In a significant regulatory move, the Bank of England has imposed a substantial fine of almost £120,000 on Iain Mark Hunter, the former Chief Executive Officer of Wyelands Bank. This action comes in the wake of "multiple breaches" of regulatory rules in the period leading up to the bank's collapse in 2020.

Wyelands Bank, a significant player in Sanjeev Gupta's GFG Alliance, once gathered over £700 million in deposits from British savers. However, concerns about the bank's financial condition prompted regulators to order the return of these deposits in March 2021.

The Prudential Regulation Authority (PRA), a division of the Bank of England, outlined that Hunter's failings included a lack of due skill, care, and diligence. Additionally, he neglected to ensure that Wyelands had adequate systems and controls, specifically concerning the large exposures regime and PRA record-keeping requirements. The regulatory scrutiny focused on events spanning from March 2016 to May 2020.

Wyelands Bank's entanglement with Gupta's GFG Alliance, a conglomerate spanning steel to finance, had already attracted censure from the PRA in April of the previous year. The bank was described as "almost entirely reliant" on customers linked to Gupta, and the regulatory body identified "wide-ranging significant regulatory failings."

A 2020 investigation by the Financial Times revealed that Wyelands had directed depositors' funds into GFG, with Greensill Capital, now-collapsed, being a significant backer of the conglomerate.

Sanjeev Gupta, once hailed as the "savior of steel" for his global acquisitions, has been grappling with challenges to sustain his metals empire since the collapse of Greensill amid fraud allegations in March 2021. The UK's Serious Fraud Office is actively conducting a criminal investigation into GFG.

In response to the regulatory action, the PRA stated that, as part of the settlement, Hunter has given an undertaking not to apply for or perform any function related to regulated activities in the future. Despite this regulatory censure, Hunter continues in his role at GFG, where he assumed the position of Chief Governance Officer in May 2021.

Sam Woods, Chief Executive of the PRA, emphasized the importance of senior individuals adhering to conduct rules, stating that failures, as exhibited by Hunter, undermine trust in financial institutions and the broader financial system. The PRA's actions against Hunter underscore the significance of responsible management in mitigating prudential risks and ensuring the safety and soundness of financial institutions.

The settlement with the PRA closed after the early settlement window, denying Hunter a 30% discount on the fine. The PRA considered Hunter's residence outside the UK and his acknowledgment of the outlined failings in the settlement.

Conclusion:

The fine imposed on Iain Mark Hunter, the former CEO of Wyelands Bank, by the Bank of England's Prudential Regulation Authority underscores the critical role of regulatory compliance in the financial sector. As Gupta's GFG Alliance navigates challenges, this development adds another layer of complexity to the conglomerate's journey. The intersection of finance and industry continues to be a focal point for scrutiny, emphasizing the need for robust governance and adherence to regulatory standards.

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