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British Steel’s auditor has resigned after struggling to verify £45m in stock, dealing a fresh blow to the Chinese-owned industrial giant as it seeks state support for its net zero plans.
The auditor also flagged “material uncertainty” about British Steel’s future amid ongoing heavy losses. In October, British Steel told trade unions that it was losing up to £30m a month.
The steelmaker’s most current accounts show it made a loss of £50m in 2021. Moore Kingston Smith the company would need more funding from Jingye, its Chinese owner, if losses continued.
Moore Kingston Smith is the second auditor to resign from working with British Steel in as many years. Previous accountants Mazars resigned in July 2022.
The loss of Moore Kingston Smith is a blow to British Steel’s hopes of securing crucial state subsidies to fund a net zero overhaul of its operations.
British Steel’s Chinese owner Jingye hopes to receive £600m from the Government to fund the closure of its blast furnaces and replacement with electric ones – a move which could impact around 2,000 employees.
A clean set of accounts are thought to be a sticking point in negotiations with ministers. The accounts for 2021, filed last week, were severely delayed and filings for the year ending December 2022 were due to be filed last September.
Jingye saved the business in March 2020 after talks between the Government and its private equity owners failed and it was put into compulsory liquidation.
The company operates two of the four remaining blast furnaces in Britain, which make steel from scratch using raw materials.
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