Source · Select Committees · Business and Trade Committee
Recommendation 17
17
Acknowledged
We did not receive evidence that the use of circular trading between companies is a...
Conclusion
We did not receive evidence that the use of circular trading between companies is a systemic issue, but note the potential criminal liability associated with the worst examples of financial engineering between businesses. Despite repeated reassurances from GFG Alliance, we remain unconvinced by Sanjeev Gupta’s attempts to re- structure and re-finance his businesses. We are not satisfied that Sanjeev Gupta is adequately addressing the many fundamental issues and concerns associated with the corporate governance, leadership, transparency, funding and operations of his businesses and remained concerned that this poses a threat to the long-term prospects of Liberty Steel UK. (Paragraph 87) Coronavirus Large Business Interruption Loans Scheme
Government response summary AI-generated
The government notes that the International Accounting Standards Board has proposed amendments to reporting supply chain finance, which the UK Endorsement Board and Financial Reporting Council will consider for adoption. The government also states it will continue to closely monitor Liberty Steel UK's restructuring and refinancing efforts.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Acknowledged
HM Government · verbatim extract
Acknowledged
25. The International Accounting Standards Board (IASB) has an active project on its agenda in respect of supply chain finance (reverse factoring) arrangements. On 26 November 2021, the IASB issued an Exposure Draft which proposed amendments to IAS: 7 Statement of Cash Flows and IFRS: 7 Financial Instrument Disclosures.
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