Ferguson spikes Tata Finance report
BS Bureaus in Mumbai
Auditors A F Ferguson & Company today sought to draw the curtains on the Tata Finance controversy by withdrawing its report on the affairs of the company.
Ferguson has assigned a new, independent team from the firm to probe the Tata Finance affairs and produce a new report.
The first report, which was critical of the working of the Tata group and the role of former Tata Finance vice-chairman Kishore Chaukar, was submitted in April.
Ferguson also returned a cheque for Rs 9.5 million, which it had accepted as part-payment for the report.
In a press statement, Ferguson expressed concern over the leak of "a strictly confidential report" to the Press "and efforts made to sensationalise its contents".
Ferguson was appointed by the Tatas to probe the Tata Finance fiasco, which rocked the country's premier corporate group last year. Subsequently, Tata Finance wrote to Ferguson on July 23, raising a number of issues relating to the preparation of the report, its conclusions and its overall credibility.
"Our preliminary reading of the report led us to believe that the client's concerns seemed to be well placed, and there were grounds for a detailed review of the report. Consequently, since the standing and credibility of our firm are of utmost importance to us, we decided (vide our letter of August 2, 2002, to Tata Finance) to withdraw the report and assigned a new, independent team to examine and review all the data and information already collected by us, with a view to producing a new report," the Ferguson release said.
Ferguson said it expected there would be no further publication of its contents. Also, the contents should not be attributed to them.
Tata Sons director (finance) Ishaat Hussain said: "I hope this puts to rest all controversies over the issue. It's over a year now. Let us concentrate on the affairs of Tata Finance."
The Tatas reportedly expressed reservations about portions of the Ferguson report and asked the firm to review some of its comments. The firm's decision to revisit the Tata Finance issue may have been prompted by these observations.
Ferguson was asked to look into Tata Finance's affairs following allegations of financial mismanagement by the company's former managing director Dilip Pendse and other senior executives.
The Ferguson report was critical of Chaukar's role in suppressing vital information about the state of Tata Finance from the board.
It also pointed out the diversion of funds by the company from the proceeds of its rights issue and questionable inter-group transactions. It found the presence of ready-forward deals between group companies circumventing inter-corporate deposit limits.