The story of the Credit Suisse funds invested with Greensill Capital caught my eye. The WSJ summarised the situation:

Four Credit Suisse funds have $7.5 billion in assets in total and are sold to institutional investors and wealthy families as safe, short-term investments. They hold securities backed by loans made to companies to allow them to pay their suppliers more quickly.

SoftBank plays three roles in the Credit Suisse funds: it is invested in the funds; it is invested in the company whose loans are held by the funds; and the funds own securities backed by loans made to other companies that SoftBank has invested in.
This type of circularity is not unusual for Softbank - for example, it encourages its employees invest in its Vision Fund with money lent by Softbank. In my experience, this type of arrangement usually causes financial structures, when they falter, to unwind faster than might otherwise be the case.

I expect this may be true for Greensill too. UK Investors may recall supply chain fallen angel Tungsten whose share price soared until it didn't. Tungsten, founded by Eddie Truell, had no backing from Softbank of course. 

Greensill is a curiosity so I decided to download the accounts. You can find them here. You will also see two changes of accounting reference date within 21 months - usually not a great signal. But what piqued my curiosity was the change of auditor in mid-2015. Grant Thornton resigned and you would imagine that a company which was about to receive an injection from Softbank and to run multi-billion dollar funds on behalf of Credit Suisse would be changing to one of the big 4.

Er, no.

Saffery Champness, actually.

Not heard of them? They had turnover of £71m in the year to 3/19 vs £491m (y/e 9/19)for Grant Thornton  (the Patisserie Holdings "auditor"). Perhaps Greensill had some misgivings about Grant Thornton so they were replaced? Saffery Champness, a much smaller firm, does not seem the most obvious choice.

Saffery Champness audited Greensill Capital UK Ltd's 2014 accounts, turnover Aus$26m and charged A$40k (no fee for the previous audit by GT). By 2018, revenues had mutiplied to $234m (real dollars) but the audit fee had only climbed to $98k.

I emphasise that I have done no work on Greensill, and have not attempted to check the accounts  - they have gone into my rather long to-do list and I shall return to this subject at a later date.

But the accounts are there if anyone is interested in taking a closer look. I suspect that it would be a rewarding foray.

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