The accounting watchdog has opened investigations into the audits of Greensill Capital UK and Wyelands Bank, adding to the flood of scrutiny on their operations.

The Financial Reporting Council (FRC) said it was examining the work of "big four" accounting firm PwC in relation to its audit of the bank - majority-owned by steel tycoon Sanjeev Gupta's GFG Alliance - for the year ending 30 April 2019.

The Bank of England forced Wyelands to hand back £210m of deposits to around 4,000 savers in February this year amid concerns for its financial position.

A month later Greensill Capital, which was a major source of finance for Mr Gupta's Liberty Steel business within GFG, filed for insolvency after losing insurance coverage for its debt repackaging business.

The FRC said it was investigating Saffery Champness over its audit of Greensill Capital for 2019.

Greensill has also faced scrutiny over the roles played by its advisers including former prime minister David Cameron in lobbying the government for financial aid during the COVID-19 pandemic.

Wyelands is on the verge of collapse after Mr Gupta said he was pulling funding from the bank having handed it a £75m loan in May 2020.

It is hunting potential new investors and its board has warned it expects the bank will be "wound up on a solvent basis" if that effort fails.

A Bank of England inquiry is examining whether Mr Gupta is "fit and proper" to be its owner.

The Serious Fraud Office revealed in May it was investigating "suspected fraud, fraudulent trading and money laundering" in relation to the financing and conduct of business of companies within GFG.

Saffery Champness said it was co-operating with the FRC while PwC responded: "We will co-operate fully with the FRC in its enquiries.

"We share the FRC's commitment to audit quality and are two years into a wide-ranging programme to enhance audit quality across the firm."

Meanwhile, also on Monday GFG said it was making good progress on previously-announced plans to restructure the business including the creation of a "restructured and refocussed" UK division.

Chief restructuring officer Jeffrey Stein said: "Much remains to be done but we are optimistic that a vibrant, well-funded, profitable and sustainable business will emerge as we systematically restructure and transform the group."

As part of the announcement, Liberty Steel UK revealed that chief executive Jon Ferriman will be stepping down at the end of this week to be replaced by industry turnaround veteran Roy Chowdhury.

Last month, Mr Gupta's business empire announced plans to sell seven UK plants employing 1,500 people as part of the restructuring - including Liberty Steel's largest site, at Stocksbridge, near Sheffield.