CA probing Xerox yet to find bribery evidence

The chartered accountant appointed to investigate the bribery scandal of Xerox ModiCorp appears to have reached a dead end, with no evidence so far of any bribes having been paid by company officials to the government and has sought time till March to complete the probe, sources said in New Delhi.

S K Jain and Company, a Delhi-based chartered accountant, had been appointed by the Department of Company Affairs late last year to conduct a probe into allegations made by Xerox Corporation in the United States that its Indian subsidiary had paid bribes to government officials to secure contracts, sources said.

The CA was to submit its reports in November last year, but sought extension till March this year, they said adding DCA has not yet taken a decision on whether the extension can be granted.

Despite several attempts, neither officials of the chartered accountant nor Xerox ModiCorp could be reached for comments.

After Xerox Corp confessed to the Securities and Exchange Commission in the US in July last about Indian JV's actions in 2000, DCA ordered a probe under section 237 of the Companies Act to find out if the management of Xerox ModiCorp was guilty of fraud.

Under section 237, the Department can investigate Xerox officials for fraud, or any other misconduct towards the company besides investigating whether the company was conducting business with intent to defraud creditors and others associated with it.

The government had ordered a probe on July 3 last year into accounts of Xerox ModiCorp after the parent company admitted that Xerox made improper payment of $700,000 to government officials in 2000 to promote business.

Sources said that scope of DCA probe was for a period of five years, including three years preceding 2000, the year for which bribes were acknowledged by Xerox in its annual report submitted to Securities and Exchange Commission.

Xerox had said that it came to know about the improper payments only after acquisition of majority stake in Xerox ModiCorp in 1999 from the B K Modi Group, which has been maintaining a total silence on the issue.