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Tata Finance picks E&Y as auditor

BS Bureaux in Mumbai

Tata Finance has appointed international consultancy and audit firm Ernst and Young as its internal auditor. The company will also be restructuring its balance sheet and increase the capital adequacy ratio to the required level of 12 per cent by March 2003.

Ishaat Hussain, chairman of Tata Finance, said at the AGM on Monday: "We appointed E&Y as the internal auditor as we want to bring in international best practices to the company."

"We are committed to taking the CAR to 12 per cent by the end of the fiscal. It is currently at 5 per cent and by December, we hope to see it improve to 8 per cent," Hussain said. "If more funds are required, Tata Sons will infuse capital into Tata Finance," he added. "Improving the CAR will be done through shrinking Tata Finance's asset base," Hussain said. Tatas have already infused around Rs 200 crore (Rs 2 billion) in the company and the balance Rs 100 crore (Rs 1 billion) will be infused by December.

Another Rs 600 crore (Rs 6 billion) is expected to be raised by shrinking of its asset base and sale of real estate holdings.

Hussain said: "The company will be getting back to its earlier business from where Tata Finance started operations -- auto financing. We have realised that auto financing is our core focus area and will divest interests in other non related areas." Hussain pointed out that the company has a large number of fixed assets, which are not being used and can be sold.

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