Friday, April 8, 2016

News: Tata Steel to be investigated for fraud - reports

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The Serious Fraud Office (SFO) has opened a criminal inquiry into Tata's steel-making operations in Yorkshire according to reports in a national newspaper.

The Telegraph reports that police officers are examining allegations that staff working for the company may have falsified certificates detailing the composition of the product before they were sold. It adds that the company referred itself to the SFO following an internal audit.

The article states: "Well-placed sources said that the documents being examined affected 500 customers, including BAE and Rolls-Royce.

"There is also a trading standards investigation, but it is unknown whether they are linked.

"The SFO inquiry is understood to centre around certificates that are produced to verify the composition of steel.

"Auditors found material that suggested inappropriate testing and certification may have occurred. At least nine employees of the firm have been suspended. There is no suggestion that the information on the certificates has led to any safety concerns."

Both the SFO and Tata declined to comment to the paper.

The disclosure follows on from rumours in November that nine directors and managers connected to the South Yorkshire operations had been suspended. The firm also refused to comment on the status of Mark Broxholme, the managing director of Speciality Steels.

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In February, the company announced that Dr Karl Koehler had decided to step down as a director of Tata Steel Limited and as chief executive officer and managing director of Tata Steel Europe.

As Kohler takes up a senior leadership position with a large privately-owned industrial company in Germany, his replacement Hans Fischer, appointed from Chief Technical Officer at Tata Steel Europe has not been given the same place on the main Tata Steel board in Mumbai.

Investment in 2005 saw the Rotherham site at Aldwarke become the focus for steel making, casting and rolling of specialist steels. The steel is manufactured at the Rotherham site before undergoing further refining at the Stocksbridge plant or the Thrybergh Bar Mill to improve the quality.

Restructuring in 2012 saw the Bar business integrated into its Speciality Steels business when Tata Steel announced that it was investing a further £2.75m in the Rotherham site.

In July last year, the Indian-owned steelmaker announced proposals for the next stage in its plans to refocus its speciality and bar business on high-value markets such as aerospace which included changes that has resulted in a reduction in employee numbers, mainly at its Rotherham-based bar business. Around 500 jobs of the 2,000 in South Yorkshire were at risk.

Last week, the Indian-owned steelmaker made the decision to sell its UK operations. Following a review of the European operations of Tata Steel, the board concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts.

Tata Steel website

Images: Tata Steel

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