Although it appears that the company referred itself to the fraud office after an internal audit, the SFO’s inquiry comes at a difficult time for the salt-to-software conglomerate, which is looking to exit its UK business.
New Delhi: The United Kingdom’s Serious Fraud Office (SFO) has opened a criminal investigation into Tata Steel’s operations over an alleged falsification of product certificates, according to a report in the Telegraph.
Although it appears that the company referred itself to the fraud office after an internal audit that threw up issues of “inappropriate testing and certification”, the SFO’s inquiry comes at a difficult time for the salt-to-software conglomerate, which is looking to exit its UK business.
After news of the report emerged, shares of Tata Steel declined 1.25% to hit a low of Rs. 319.90 on the Bombay Stock Exchange.
According to the Telegraph, the SFO’s investigation will centre around Tata Steel’s production site in Yorkshire and deals with whether the certificates, that detailed the composition of the product before they were sold, were falsified. An internal Tata Steel audit found that “inappropriate testing and certification” may have occurred, resulting in the suspension of nine employees.
The report also points out that the certificates and documents that are currently being examined may have affected over 500 customers, including BAE and Rolls-Royce. A Rolls-Royce spokesperson, quoted in the Telegraph article, indicated that they were made aware of the issue by Tata a year ago.
Tata’s UK steel business has been making headlines both in India and the UK over the last few weeks, after it announced that it would sell the unprofitable division, citing issues of global oversupply and high costs.
The decision to sell has set off ripples in the United Kingdom, as Tata employs nearly 40,000 people in the country, with UK business secretary Sajid Javid cutting short an Australia trip to rush to India to ensure that Tata acts as what he calls a “responsible seller”.
Next week, Tata will start the process of its sale by initiating talks with the Liberty House Group, which has expressed interest in the company’s Port Talbot plant and its British processing operations.