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‘Indian entities got illegal money from US firms’

Under the US Foreign Corrupt Practices Act,all US companies must provide details of illegal payments made in foreign countries.

The BJP on Monday asked the union government to explain “its silence” over a letter written by India’s ambassador to the US,Meera Shankar,to Principal Secretary in the Prime Minister’s Office,T K A Nair,on May 12,2009,giving “seven instances of corruption wherein government firms or people in India are alleged to have been benefited by various US companies”.

Four of these instances are from the time the NDA was in power. BJP spokesperson Prakash Javadekar,who released Shankar’s letter,however,said it wasn’t an “UPA vs NDA issue”. “It’s been five months since the letter was released. We want to know why no action has been taken on the basis of the revelations,” he said.

Under the US Foreign Corrupt Practices Act,all US companies must provide details of illegal payments made in foreign countries. In her letter,as released by Javadekar,Shankar listed the following instances of payments made to Indian entities:

* On January 9,2009,Mario Covino of Control Companies allegedly pleaded guilty to making illegal payments of over $ 1 million to employees of state-owned entities,including the Maharashtra State Electricity Board.

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* On Feb 14,2008,Westinghouse Air Brake Technologies Corporation’s Indian subsidiary,Pioneer Friction Ltd,settled civil charges in connection with improper payments to employees of Indian Railways. The $137,400-payment was made between 2001 and 2005.

* Subsidiaries of York International Corporation allegedly made improper payments of over $ 7.5 million to secure orders in various countries,including India. Payments were made from 2001 to 2006.

* C Srinivasan,a former president of A T Kearney India Ltd,allegedly made improper payments of $720,000 to senior employees of two partially state owned enterprises in India between 2001 and 2003.

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* Textron’s subsidiaries allegedly made improper payments to secure contracts in various countries including India in the 2001-2005 period.

* Dow Chemicals subsidiary,DE-Nocil Crop Protection Ltd,allegedly made improper payments to various officials,including to an official in Central Insecticides Board. Pride International too,may have made third-party payments.

PMO sources said the matter had been referred to the Finance Ministry whose revenue department asked the Enforcement Directorate (ED) to investigate. The ED is learnt to have asked for more details. A case under the Prevention of Money Laundering Act or FEMA could be filed if authorities are able to establish a credible case,sources said.

First published on: 13-10-2009 at 08:59:41 am
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