The Hindu Business Line : `Payments' to Govt officials — Panel probing Xerox Modi to meet this month-end

THE inter-ministerial group set up to examine whether Xerox Modicorp Ltd is guilty of siphoning off funds or indulged in making `improper payments' to Government officials for securing high-value orders is set to hold its first meeting by the end of this month.

Sources said that a ministerial panel has been set up to examine whether the company is guilty of fraud.

The sources told Business Line that the investigations by an independent investigator appointed by the Ministry of Company Affairs, whose report was subsequently examined by a high-level team of the Ministry, has revealed that there was siphoning of funds.

However, a major foreign shareholder had alleged the Indian subsidiary of Xerox Corporation of making `improper payments' to Indian officials. The IMG is to examine this aspect, sources said.

The IMG will comprise nominees of the Revenue Department, the Central Bureau of Investigation, the Law Ministry and the Company Affairs Ministry.

In June 2004, the Delhi-based chartered accountant firm Surendar K. Jain & Co, appointed as independent investigator, submitted its report to the Ministry. It took the firm close to two years to complete its investigation.

This was one of the rare instances in which the Ministry had mandated an outside professional to probe a case falling under its purview. The independent investigators were appointed in August 2002.

This move followed Xerox Corporation's revelations to the Securities and Exchange Commission in the US that the Indian subsidiary had made "improper payments" to Indian Government officials for securing high-value orders.

The investigators had also looked into the role of foreign representatives on the board of the company. The investigators were asked to commission the enquiry through a separate body, which would route the queries through the consulates of the countries to which the representatives of the board belong.

It may be recalled that after obtaining the Company Law Board order to inquire into Xerox Modicorp dealings, the Ministry had decided to appoint an independent investigating officer.

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