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The Bank of England has fined the prominent English financier Jay Hambro for his conduct while a director of Wyelands Bank, the British lender owned by Sanjeev Gupta that collapsed in a scandal.
The BoE’s Prudential Regulation Authority said on Wednesday that it had fined Hambro £72,000 for conduct that “fell below the standards expected of a person in his position in an authorised firm and demonstrated a serious lack of due skill, care and diligence”.
Wyelands was part of Gupta’s GFG Alliance steel-to-finance conglomerate. At its peak, the bank gathered more than £700mn in deposits from savers but was ordered to return them in March 2021 when regulators became concerned about its financial condition.
Hambro, a scion of the well-known English banking dynasty with deep connections to the mining sector, was GFG’s chief investment officer and sat on Wyelands Bank’s board as a representative of its shareholder between December 2016 and July 2021.
Sam Woods, chief executive of the PRA, said: “We have taken this action against Mr Hambro because his breaches and failings contributed to creating prudential risks which threatened the safety and soundness of Wyelands Bank.”
Jay Hambro separately issued an apology to the regulator on Wednesday.
“I had never been the director of a PRA-regulated entity prior to my appointment and now accept that I should have showed a greater level of assiduousness as a non-executive director,” he said.
“I think we can all learn a great deal from this process and I am pleased to conclude it constructively with this settlement.”
Hambro’s fine is the latest in a string of regulatory actions taken in relation to the collapse of Wyelands Bank, which a series of Financial Times investigations revealed was lending substantial sums to Gupta’s wider industrial empire.
The UK accounting regulator last week fined PwC £2.9mn for “serious and numerous” failures in its audit of Wyelands. The PRA last year fined Iain Hunter, Wyelands’ former chief executive, almost £120,000 for “multiple breaches” of regulatory rules.
In Wednesday’s final notice, the PRA listed a number of specific failings on the part of Hambro, largely related to the bank’s dealings with other businesses connected to GFG.
In January 2019, for example, “Hambro and others within GFG became aware that the ultimate owner” of a business that had borrowed from Wyelands Bank “was also listed as a director of a GFG entity”.
The following month, Hambro “gave instructions” to another executive to “record the date” the company’s owner resigned from the GFG company’s board as pre-September 2018, a date before Wyelands entered the transaction.
The PRA added that Hambro “did not make sufficient inquiries as to the date” the resignation actually occurred. Hambro told the PRA that he was passing on “oral instructions” he had received and that “he took comfort from the involvement of the GFG legal department”.
The PRA imposes strict limits on the amount of so-called “related party” lending a bank can carry out. Wyelands Bank also breached “large exposure” limits on lending to a “group of connected parties” through its dealings with entities linked to Gupta.
Hambro left GFG in 2021 after a rift with Gupta. He established his own firm, Verdigris Strategic, later that year to pursue deals in the metals and mining sector.
The UK’s Serious Fraud Office is conducting a criminal investigation into GFG, which has previously denied wrongdoing.
