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Authors of original report quit

BS Corporate in Mumbai

A Tata source on Wednesday accused senior AF Ferguson partner Y M Kale of withholding a key statement that implicated former Tata Finance managing director Dilip Pendse and other former Tata Finance executives in falsification of accounts, despite repeated requests for the statement.

If Kale had withheld the statement, it would explain why Ferguson withdrew its report. Kale and the investigation team are reported to have resigned from Ferguson. Ferguson officials and Kale were not available for comments.

The Tata source said the Tatas wrote to Ferguson on July 23 referring to this. Replying to the letter from the Tatas, Ferguson said while it was not in a position to respond to each point raised in the letter, "your concern seems to be well placed."

Ferguson added it was "astounded" by the conduct of the partner and all Tata Finance papers had been withdrawn from him. Ferguson also enclosed the statement the Tatas had requested.

The Tata source said P P Karyekar, company secretary at Niskalp Investments & Trading Company Ltd (Tata Finance's subsidiary till it was spun off after the financial shenanigans at Tata Finance were discovered), had recorded a statement on August 9, 2001, that accused Pendse and others of falsifying the firm's accounts.

"We pleaded with the partner and said evidence was required in our case against Pendse. But he refused to part with it," the source said.

Earlier, Tata Sons finance director Ishaat Hussain, also Tata Finance chairman, told reporters: "No pressure, overt or covert, was brought by the Tatas on Ferguson to withdraw the report. That is not our style."

Hussain said Ferguson had first submitted a report on June 27, 2001, which broadly dealt with Tata Finance's financial position and its collapse. The Tatas then asked Ferguson to investigate the whole Tata Finance matter.

Asked whether Ferguson had then submitted a draft of the report that it has now withdrawn, Hussain said Ferguson had submitted an interim report in November 2001, many parts of which the Tatas disagreed with. Changes were made in the report and the final report was submitted in April this year.

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