Stenn Collapse Triggers FRC Audit Probe Into Deloitte and Azets

The Financial Reporting Council (FRC) has launched a formal investigation into Deloitte and Azets over their audit work for Stenn, a UK-based fintech lender that collapsed after concerns emerged around suspicious transactions and alleged Russian money laundering connections.

Stenn, once valued at nearly $1 billion, operated by providing cash advances to small and medium-sized businesses through invoice financing. The company was backed by Centerbridge, a major American private equity group, and presented itself as a financial technology innovator despite being rooted in traditional invoice factoring.

HSBC Investigation Triggered Insolvency

Stenn’s downfall began when HSBC, its primary lender, became alarmed by transactions that appeared irregular. The bank initiated a review after Stenn was briefly named in a US criminal indictment linked to Russian financial crime networks.

Following this, some of Stenn’s claimed counterparties denied any relationship with the firm, raising red flags about the legitimacy of its business structure. In December 2024, HSBC requested the courts to place Stenn Assets UK and Stenn International into administration. High Court Justice Adam Johnson noted HSBC’s serious doubts over Stenn’s business model.

FRC Targets Multiple Audit Years

The FRC is now examining audits carried out by:

• Azets (formerly Wilkins Kennedy) for Stenn’s 2017, 2018, and 2022 accounts
• Deloitte for its 2023 audit of the firm

These audits are being reviewed to determine whether either firm failed in their responsibilities to detect irregularities in Stenn’s financial reporting.

Notably, EY (Ernst & Young) resigned as auditor of Stenn International in 2018 due to “concerns over related party transactions” and insufficient explanations from the company’s management.

Silverbird and Russian Connections

The case has also drawn attention due to the role of Greg Karpovsky, Stenn’s Russian-born founder. Karpovsky was previously a director of Silverbird, a digital payments firm that went bankrupt in March 2024 after its leadership discovered possible sanctions violations tied to transactions in 2022 and 2023.

While Stenn and Karpovsky are not accused of wrongdoing in the US criminal investigation, and they were not named as defendants, the connections have nonetheless deepened regulatory concern.

Karpovsky has publicly denied any misconduct.

Big Names, No Allegations

Major financial institutions including M&G Investments, Barclays, Citigroup, Goldman Sachs, and Natixis have all previously worked with Stenn. However, there is no suggestion of wrongdoing by any of these companies.

Administration and Forensic Review Underway

Insolvency specialists from Interpath are now reviewing Stenn’s internal operations. They are assessing the firm’s structure, asset management practices, and the origin and allocation of tens of millions of dollars in company accounts.

This case has drawn comparisons to the collapse of Greensill Capital, the controversial finance firm once connected to former Prime Minister David Cameron. Like Greensill, Stenn’s downfall has raised new alarms around the risks and vulnerabilities within the invoice financing sector.

Official Statements

A Deloitte spokesperson said:

“We will co-operate fully with the Financial Reporting Council’s investigation. We remain committed to the highest standards of audit quality.”

A representative for Azets added:

 “We responded promptly to the FRC’s request for information and are co-operating fully with its formal investigation.”

Regulatory Timeline

The FRC officially opened the investigation in May 2025, after multiple financial watchdogs flagged inconsistencies in Stenn’s filings and invoice claims. The outcome may set new precedents for how fintech auditing is regulated in the UK, particularly in high-risk financial services.

Culled from The Times