The Enforcement Directorate has imposed Rs 60 lakh penalty on a Jodhpur-based company in the 2001 Iraqi oil-for-food scam which led to the resignation of former external affairs minister K Natwar Singh. The Jaipur zone of ED imposed the penalty of Rs 40 lakh on M/s Alcobex Metals Ltd, and Rs 20 lakh on G C Kanunga, managing director of the firm, under the Foreign Exchange Management Act (FEMA), an ED official said.
The Jaipur zone of ED imposed the penalty of Rs 40 lakh on M/s Alcobex Metals Ltd, and Rs 20 lakh on G C Kanunga, managing director of the firm, under the Foreign Exchange Management Act (FEMA), an ED official said. According to the investigative agency, the company paid kickbacks to Iraqi officials in the form of payments of road transport and also failed to realise the full value of the exports.
The ED sleuths had initiated inquiries based on the Volcker report pertaining to an allegation of receipt of payment of kickbacks in respect of humanitarian goods under the oil-for-food programme run by the United Nations in Iraq. The official said the company had signed two agreements amounting to USD 28,81,125 for the export of heat exchanger copper alloy tubes. “The company had made payment of USD 1,09,389 towards road transport in Iraq for exported goods, but did not provide any proof of the payment,” he said, adding the company had not realised export payment of around USD 2,06,500.
According to FEMA, receipt of short payment of exports and any payment made through non-banking channels amount to a violation of the provisions of the Act. The official said although the company had claimed that they did not make any payment through unauthorised banking channels, it failed to provide documentary evidence in support of its claims.
The UN-appointed Volcker Committee had named Natwar Singh and the Congress party as “non-contractual beneficiaries” of the programme, triggering a political controversy that forced him to resign as external affairs minister on November 8, 2005.