Tata has 'dodged a reputational bullet' over the steel crisis, MT wrote last week, but perhaps we spoke too soon. In a case of remarkably unfortunate timing, the Indian conglomerate’s UK steel division is reportedly under investigation by the Serious Fraud Office.
According to the Telegraph, the SFO has opened a criminal inquiry after claims the company fudged certificates that detailed the makeup of steel it was producing at a plant in Yorkshire. Around 500 customers are thought to be affected, including BAE and Rolls-Royce, and apparently trading standards has been sniffing around too.
Tata reported itself after an internal audit and nine employees have been suspended, the Telegraph said. While there are no suggestions the certificates have caused a safety risk, the timing really is less than ideal for Tata, which is in the middle of crunch talks over the sale of its UK steel operations.
It looks like the plan is to sell its Scunthorpe steelworks, one of its two full-on blast furnace sites in the UK, to Greybull Capital, a London-based family office that plans to invest £400m in the plant. The BBC says that deal (which would also include two mills in Teesside and some other small operations) could be sealed as soon as Monday, securing around 4,800 jobs.
Meanwhile the Indian tycoon Sanjeev Gupta could be in line to take on Port Talbot, Tata’s other blast furnace site, if he can talk the government into sweetening the deal. A major sticking point has been Tata’s pension scheme, which currently has a £500m deficit that needs to be plugged – which the taxpayer will likely end up being on the hook for, should a deal go ahead.
‘Either we want a clean asset, which is going to be tough, or we want support to broker a deal that’s going to be equitable,’ Gupta told the FT earlier this week. Hopefully for the workers at Port Talbot, this latest news won't give him pause for thought.