The year-long probe into Xerox Modicorp bribery scandal by an independent auditor appears nowhere near the end, with examination of two former managing directors of the company being carried out by the Department of Company Affairs through embassies in Brazil and the United States.
I-T department conducts raids on Xerox offices
Modis blame Xerox for bribery woes
A senior DCA official said on Tuesday that the two MDs, who worked in Xerox's Indian operations, were being questioned through the embassies in the two countries, but declined to specify any timeframe by when the investigation would be completed.
The investigation, which began in August last year, has turned out to be a comprehensive one and about 100-115 witnesses have already been examined.
The probe is being conducted by New Delhi-based chartered accountant SK Jain and Company, which was mandated under Section 237 of the Companies Act to determine whether the company or its employees committed fraud.
In July last year, Xerox Corporation had disclosed to the Securities and Exchange Commission of the United Stated that officials of its Indian joint venture with the B K Modi group paid bribes to government officials to secure contracts.
Xerox had reportedly put the bribery figure at $700,000.
Under section 237, the Department can investigate XML 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 XML 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 acknowleded by the Xerox in its annual report submitted to SEC.
Xerox had said that it came to know about the improper payments only after acquisition of majority stake in the Xerox ModiCorp in 1999 from the B K Modi Group, which has been maintaining a total silence on the issue.
© 2025