Andaleeb Sehgal, director of Hamdaan Exports, which is embroiled in oil-for-food controversy, has admitted that he had taken two letters of introduction from former external affairs minister K Natwar Singh to the Iraqi Oil ministry. This has been learnt from sources in the Pathak Inquiry Authority, which is probing the Indian angle of the scam.

In his affidavit submitted to the Authority, Sehgal, a friend of Natwar's son Jagat Singh, traced the events leading to getting the introduction letters on All India Congress Committee letterheads, the sources said.

According to Sehgal, he reached Baghdad in January 2001 and participated in the reception hosted by the Indian Ambassador there; he introduced himself as a food exporter. He had met Natwar Singh at the party, Authority sources said.

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The Iraqi State Oil Marketing Organisation told Sehgal that a company recognised by the United Nations as a dealer of oil would be registered with the Ministry and if Andaleeb could arrange for sale of oil, they would help him qualify for supplying of food and other products.

Andaleeb also said in his affidavit that he needed a credible letter of introduction or recommendation from, possibly, the government of India and had expressed his wish to be associated with one of the UN-registered oil companies.

Authority sources said it was keeping this in view that Sehgal talked about taking two letters of introduction from Natwar Singh for the Iraqi Oil ministry. ED sources have already said these letters were written by Natwar Singh on AICC letterheads.

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According to them, the ED has already traced a big part of the money trail to Sehgal. On perusal of the evidence supplied to it by the ED, the Pathak Authority found that $7,000 dollars were deposited on June 12, 2001 in Sehgal's bank accounts.

Further, on June 25, 2001, another $40,000 were deposited in Sehgal's account and on August 2, 2001 another $3793.52 were deposited in his account, the sources said. However, they said it was still not clear whether any of this money was further traced to any of the people named in the Volcker report.

There are also indications that while ED is ready with its interim reports, a further set of documents would be provided to the Pathak Authority by ED in the next few days, panel sources said. They said Natwar Singh's son Jagat Singh would be soon called for a second round of questioning.

Complete coverage: The Volcker report