UK Serious Fraud Office opens probe into Tata Steel operations

Melbourne: The UK Serious Fraud Office has opened an investigation into Tata Steel Ltd’s operations in the country over allegations related to certificates used to verify the composition of its products, the Daily Telegraph reported, citing unidentified people familiar with the matter.

Mumbai-based Tata Steel, which is seeking to sell its UK businesses, referred itself to the fraud office after an internal audit suggested inappropriate testing and certification, the newspaper said on Thursday. The documents involve 500 customers, the Daily Telegraph reported, without saying when the investigation was opened.

A London-based spokeswoman for the Serious Fraud Office declined to comment when reached by Bloomberg News over phone.

Tata Steel UK, a subsidiary of Tata Steel Europe, said it would like to clarify that the matter related to events in 2015 when, during an internal audit conducted by the company, certain inappropriate testing and certification procedures at the South Yorkshire-based Speciality Steels business were identified.

“A full investigation was initiated internally and undertaken with the help of experts. Tata Steel UK took immediate action to address the issues uncovered. The practices were immediately stopped. A detailed investigation was carried out by a technical team from outside the Speciality Steels business, and its conclusions were verified by independent experts. The investigation found that the steel affected and supplied was always well within safety margins,” a Tata spokesperson said on Friday.

The spokesperson said affected stock was quarantined and assessed, and was either scrapped, transferred to another order or released as appropriate.

A number of Speciality Steels personnel were suspended, the spokesperson said.

Tata Steel 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.

The Indian steelmaker said last week that it’s considering the sale of 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 jeopardize about 40,000 jobs.

Steelmakers around the world have seen profits eroded by a flood of cheap exports from China. Bloomberg

Mint’s P.R. Sanjai contributed to this story.