UK Serious Fraud Office opens probe into Tata Steel after audit
April 09 2016 08:02 PM
UK
A Tata Steel plant in the town of Port Talbot, Wales. The Mumbai-based steel manufacturer is scheduled to begin talks next week with Liberty House Group about selling the plant and its British processing operations, as it seeks to exit UK businesses.

Bloomberg/Mumbai

The UK Serious Fraud Office opened a criminal investigation after Tata Steel identified a lapse in procedures at its Speciality Steels business through an internal audit in 2015, the company said in an exchange filing yesterday.
“Certain inappropriate testing and certification procedures at the South Yorkshire-based Speciality Steels business were identified” in the audit, the company said. “Amongst other bodies proactively notified by Tata Steel UK was the Serious Fraud Office, which has opened a criminal investigation.” The company immediately stopped the practices after an internal investigation, and suspended a number of Speciality Steels personnel, according to the statement. The investigation found that the “steel affected and supplied was always well within safety margins,” Tata Steel said.
The Serious Fraud Office said on Friday it had started the probe into activity at the company’s Speciality Steels unit in December.
The Mumbai-based steel manufacturer is scheduled to begin talks next week with Liberty House Group about selling its Port Talbot plant and its British processing operations, as it seeks to exit its UK businesses.
Prospective buyers for the UK division “can raise some concerns because of the liabilities” arising from the investigations, Goutam Chakraborty, an analyst at Emkay Global Financial Services, said by phone from Mumbai. “If it is a serious thing then it will give the buyers more bargaining power and make things a little more complicated.” The Indian producer said last week it’s considering selling its unprofitable UK division, citing global oversupply, high costs and rising steel exports that mean trading conditions in the UK and Europe have deteriorated. The move may jeopardise about 40,000 jobs. British Foreign Secretary Philip Hammond said yesterday he had raised the issue of steel production over-capacity during talks with Chinese Foreign Minister Wang Yi in Beijing.
“I urged China to accelerate its efforts to reduce levels of steel production,” Hammond said. “The UK’s focus is on finding a long-term sustainable future for steel-making at Port Talbot and across the UK, and I welcomed the potential interest of Chinese companies in investment in UK steel-making.” Steel companies across the globe are having to find ways to deal with the impact of a heavily oversupplied market on their balance sheets. Tata Steel is said to be in advanced talks with ThyssenKrupp about starting a joint venture between some European businesses. ArcelorMittal successfully completed a $3bn rights issue on Monday, while Vallourec started a €1bn capital raise on Friday.



There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MORE NEWS

HAPPENING IN DOHAMore