The businessman behind Liberty Steel has pulled the plug on Wyelands Bank, a lender he is the biggest shareholder in.

The bank’s board said it was looking for new owners after Sanjeev Gupta told them he would not continue to prop up the ailing lender.

In May last year, Mr Gupta, whose business empire was closely linked to collapsed financing company Greensill, gave the bank a loan of £75 million.

“The shareholder has now indicated that he will not be providing further funds to finance a new strategy for the bank,” Wyelands’ board said on Wednesday.

It said that chief executive officer Stephen Rose has now been authorised to speak with potential new investors in an effort to preserve its future.

The board said that it expects the bank will be “wound up on a solvent basis” if it fails to secure a sale to new backers.

The update comes two months after the lender was ordered by the Bank of England to repay customer deposits amid fears over Wyelands’ financial position.

Wyelands said on Thursday that is has almost completed this process and repaid around £194 million in deposits by March.

It added that remaining borrowers have been told they will need to find new financing facilities from other lenders.

The company also filed its accounts for the year to April 2020, which revealed that it plunged to a £63 million pre-tax loss after being hit with more than £61 million in impairments on loans.