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Home > Business > Business Headline > Report


Corporates refute Volcker charge

BS Bureaus in New Delhi/Mumbai | October 31, 2005 09:11 IST

Indian companies named by the Paul Volcker committee in its report on the UN's oil-for-food programme for Iraq on Sunday denied indulging in illegal activities while being part of the project.

Cipla, Ajanta Pharma, Ranbaxy, Godrej & Boyce, Reliance Industries, Tata International, Indian Oil Corporation and RITES Ltd are among 130 Indian companies that have been named by the report.

The report says that these firms have made payments of $22 million while executing contracts worth $425 million. The report categorises these payments as after-sales service fees and inland transportation fees.

Confederation of Indian Industry, actively involved in reconstruction activities in Iraq, has decided to talk to its member companies on the issue.

CII director-general N Srinivasan said, "We will talk to those companies in the list which are members of the CII and get their side of the story."

Officials said India had excellent relations with Iraq and a number of Indian companies had been working on projects in that country. India was buying about 5 per cent of its crude requirement from Iraq till the 2003 Gulf War broke out. Indian refiners were buying about 7,000 barrels a day of Iraqi crude from the spot market.

Executives of both Reliance Industries and IOC said the companies had purchased oil from Iraq under the programme but denied that they paid "commissions". RIL said it was probing the allegations and would issue a statement later, while an IOC executive said the company did not see anything wrong in doing business with Iraq.

"We bought oil both directly and through traders. We did not pay kickbacks but if traders indulged in any illegal activity, we have no means to know," said an IOC executive. IOC and RIL lifted 42.5 million barrels and 2.8 million barrels of crude oil, respectively, under the programme.

RITES said it executed two small-value contracts under the UN programme.

"The Iraqi railways wanted the delivery of wagon parts at the port of Basra but later changed it to Baghdad for which they suggested a transportation company. We included the transportation cost in our bid price," said a RITES executive adding that the company was not aware if the transportation firm had any link with Saddam Hussein's family.

The executive also denied that the independent inquiry committee, headed by Paul Volcker, former chairman of the US Federal Reserve, contacted RITES for its version.

A Wockhardt executive said the alleged involvement of Indian companies, including Wockhardt, might not necessarily be true. However, since its name had appeared in the media, the company might look into the matter to ascertain facts.

Executives of Lyka Labs, Ajanta Pharma, Cipla and Ranbaxy were either not available for comments or declined to react.

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