Bank of England suspected Gupta bank in 2019

Wyelands Bank, part of beleaguered businessman Sanjeev Gupta's GFG Group, was probed by the Bank of England in 2019, governor Andrew Bailey has said.

Wyelands Bank is facing possible liquidation, while GFG has been under pressure since its biggest lender, Greensill Capital, collapsed in March.

Before Greensill's demise, ex-prime minister David Cameron lobbied the Bank of England on its behalf.

Mr Bailey has now said the Bank already had concerns about Wyelands then.

He said those concerns were around "connected lending in the context of the ultimate beneficial owner who is Mr Gupta".

The Bank notified the National Crime Agency in late 2019 in relation to Wyelands, a bank that lent to investors, Mr Bailey told the Treasury committee of MPs.

The Bank then set out its concerns to the Serious Fraud Office in early 2020.

The developments have added to the uncertainty surrounding GFG, which also owns the UK's Liberty Steel.

• Gupta-owned bank faces possible liquidation

• Clock ticking on Gupta's fight to save his empire

In his evidence, Mr Bailey said that after initial concerns were raised about lending to related parties in late 2018-early 2019, the Prudential Regulatory Authority (PRA) of the Bank of England began investigating Wyelands.

In October 2019, further allegations came to light concerning the loan book. That prompted the PRA to launch a second phase of its investigation.

Mr Bailey said the PRA notified the National Crime Agency of its concerns in November 2019 and again in February 2020. It launched further investigations, some of which were overt, while others were not.

He added that the PRA set out its concerns about Wyelands Bank to the Serious Fraud Office in February 2020.

The timing of the PRA's concerns confirms the Bank of England was aware of suspicions of criminal activity in relation to Wyelands, months before it entered correspondence with Mr Cameron about allowing Greensill to be accredited to lend under emergency lending schemes.

The date is months ahead of lobbying of the Bank of England by Mr Cameron to allow Greensill to be accredited under the Covid Corporate Finance Facility.

Mr Bailey said he was setting out the PRA's concerns about Wyelands for the first time.

Mr Bailey told the committee Wyelands Bank was not mentioned in the correspondence between Mr Cameron and the Bank.