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EY sounds alarm over Sanjeev Gupta-backed tidal energy firm

Auditors have raised a red flag over a tidal energy company backed by Sanjeev Gupta.

EY issued a rare “disclaimer of opinion” over the latest accounts of Atlantis Resources (Scotland), noting financial uncertainties.  

The Edinburgh-based company is a subsidiary of Aim-listed Simec Atlantis Energy, which is behind projects including the MeyGen tidal power project in Scotland.

Simec Atlantis Energy’s 41pc shareholder Simec UK Energy Holdings is part of Gupta’s GFG Alliance, which is under investigation by the Serious Fraud Office.

Auditors said they were “unable to form an opinion on [Atlantis Resource’s] financial statements”, given its reliance on funding from Simec Atlantis Energy.

In June Simec Atlantis Energy flagged uncertainties over finances such as access to loans from Simec UK Energy Holdings, and the refinancing of bonds due for repayment in 2022.

It said there were also uncertainties over proceeds from a fund raise and the timing of repayment of EU grant funding.

Receivers were appointed over its shareholder Simec UK Energy Holdings in May, but had been stood down by July.

In their disclaimer of opinion on Atlantis Resources published at the end of last month, EY said the “potential interaction of material uncertainties” meant they were unable “to conclude that the use of the going concern assumption is appropriate”.

EY also published a disclaimer of opinion on Simec Atlantis Energy in June, noting the “potential interaction of the uncertainties and the possible cumulative effect”.

The Serious Fraud Office opened a fraud and money-laundering investigation into Gupta’s GFG Alliance in May, including its relationship with finance firm Greensill Capital.

Accounts for Atlantis Resources note it is not clear what impact, if any, this might have on its parent company.

It added Simec Atlantis Energy has “never had any financing relationship with Greensill Capital, is not a member of the GFG Alliance, and is an independent company whose shares are admitted to trading on the Aim”.

Simec Atlantis and GFG declined to comment. 

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