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Report: Troubled Tata Steel faces federal fraud inquiry in UK


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Report: Troubled Tata Steel faces federal fraud inquiry in UK

Tata SteelLtd. is under investigation by the U.K. Serious Fraud Office forallegedly fabricating certificates specifying production composition beforethey were sold, The Daily Telegraphreported April 8.

Its U.K. operations are up for sale and a deal for its Scunthorpe plant may besigned as early as April 11, according to BBC News. A sale to Greybull Capitalwould involve a £400 million investment to return the loss-making operations toprofitability.

The police are investigating claims that staff at thecompany's Yorkshire office falsified the certificates, with about 500 customerssaid to be affected by the forged licenses.

The company referred itself for the inquiry after aninternal audit, the report said.

A trading standards investigation is also going on at thesteel-making operation, The Telegraphadded, noting that it was not clear whether the two probes are linked.

Previously in April, Fitch Ratings Tata Steel and itssubsidiary, Tata Steel UKHoldings Ltd., to BB from BB+/Stable, citing the decline inprofitability and jump in leverage in fiscal year 2016, amid challenging marketconditions in India and overseas, especially in the U.K.

The company's finance director Koushik Chatterjee said inlate-March that the bookvalue of Tata Steel's lossmaking steel operations up for sale inthe U.K. is "almost zero."

Separately, the company made a profit of an estimated £700million by selling carbon emissions permits that it received for free under anEU trading scheme, BBC News reported citing experts. Three experts reportedlysaid that the company was given more carbon allowances than it really needed.It is not believed to have violated any laws through the move.