rediff.com: Xerox to fully cooperate with enquiry

Xerox Corporation on Thursday said it would fully cooperate with the government enquiry into Indian subsidiary Xerox ModiCorp's improper payments of $7,00,000 to government officials for promoting its business.

"We welcome the government investigations following our voluntary submissions to the US and Indian authorities and will cooperate fully with their enquiries," Jule E Limoli, vice president Xerox MIERA Group and chairman Xerox Modicorp Ltd, said in a statement in London.

Expressing confidence that the investigations would establish the truth, Limoli said, "India remains an important element of our strategy."

Elaborating on the issue, Limoli said that knowledge of improper payments was obtained after Xerox Corporation replaced the management originally appointed by Modicorp.

Upon learning of the improper activity, Xerox immediately ordered that the practice be stopped, Limoli said, adding that the senior managers responsible for the improper disbursements were no longer with the company.

He said the company would continue to take action to eradicate any behaviour that falls short of those standards and to repudiate any misstatement of facts about its business in India.

Xerox is committed to serve its customers by bringing to the market the latest document management technology and services, the statement said, adding, "We will do that to the highest standards of professional and ethical behaviour".

Commenting on its future relationship with Modicorp, Xerox also said that the company is always evaluating its business alliances to ensure that the most appropriate structures are in place to meet the business needs.

The government had on Wednesday ordered a probe into Xerox Modicorp's accounts following admission of improper payments to government officials in 2000 to promote business even as CBI swung into action to gather intelligence about the beneficiaries of bribery.

Central Bureau of Investigation sources said that once definite information was gathered, a suo moto action could be taken against the beneficiaries under the Prevention of Corruption Act.

The statement issued by Xerox said the company had in October 2000 discovered that members of the senior management team of Xerox Modicorp Ltd, a joint venture company of which Xerox gained majority ownership in August 1999, were providing improper payments to government employees in connection with equipment sales.

Xerox had attorneys in the US and the auditing firm PricewaterhouseCoopers to investigate the issue independently.

"On completion of the investigation which validated the company's internal findings, Xerox voluntarily disclosed the issue to both Securities and Exchange Commission and Department of Justice of the US," the statement said, adding that the company had also voluntarily notified the Indian authorities.



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