» Business » Volcker charges baseless, says Anil Agarwal

Volcker charges baseless, says Anil Agarwal

By Ruchi Ahuja in New Delhi
November 22, 2005 10:26 IST
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Associated Chambers of Commerce & Industry president Anil K Agarwal, whose Cosmos Group has been named among the 123 Indian companies that "benefited" from contracts under the United Nations' Oil-for-Food programme for Iraq, has said the allegations made in the Volcker Committee report were baseless.

"No Indian company received any undue benefit out of supplies made to Iraq and each order execution, in totality, was done within the purview of Indian law. For Indian companies, this has been a purely commercial transaction, as envisaged under the provisions of the UN Oil for Food programme. We must understand that Volcker Committee's report is about the need to make UN procedures more transparent," he said.

According to Agarwal, there is a need to understand that the bulk of the Indian companies named in the Volcker Report were not involved in oil trade but in export contracts for necessary supplies like grain, vegetable oil, etc.

"Indian companies account for just $22 million out of the total charge of $1.5 billion. We need to understand that Indian companies got only a handful of export orders from Iraq compared to the numerous that fell in the kitty of China, Jordan, Europe, Syria or the United Arab Emirates," he said.

The UN programme was fully controlled by UN Committee 661. As per procedure, Iraqi ministries had invited open global tenders. Contracts were signed after the approval of bids and were then sent to UN Committee 661 via the concerned ministry of external affairs and the permanent mission of the country based in New York.

The committee members, who met every fortnight, would then review each contract on the basis of item required, unit price and total value. "The review was quite stringent. For instance, the UN Committee rejected a contract won by Tatas for buses as they could have been used for dual purposes, that is for military purposes also," Agarwal said.

Once the UN Committee approved the contract, details were sent to the Iraqi government and the concerned contract awardee's country with their approval number. Only after this would the contract be put into operation.

Following a request of the Iraqi government, the UN-controlled Banque National de Paris, New York, would establish letters of credit in favour of banks, for the accounts of the concerned exporters.

As the contracts were ex-Baghdad C.I.F. (cost, insurance and freight), the exporting companies, especially in India, duly declared the cost, insurance, freight, outward freight charges from the Indian port to the Iraqi port (Umm-Qasr) and the inland transportation charges in the export documents, he said.

"All payments were sent through Indian banking channels via authorised dealers as declared in the export documents. Further, all cargoes were checked on arrival at the Iraqi port and payments thereafter were released by BNP only after receipt of Cargo Arrival Notice," Agarwal added.
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Ruchi Ahuja in New Delhi
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