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Keith Vaz faces inquiry in illicit payments row

Paran Balakrishnan in London

Britain's parliamentary standards commissioner has confirmed that she is investigating the country's first Asian minister, Keith Vaz, over allegations that he accepted payments from a London-based solicitor, Sarosh Zaiwalla.

Vaz, a minister of state in the foreign office, has strenuously rejected the allegations made by a former senior partner at Zaiwalla & Co. "I have not received any payments of any kind," the Labour Party politician said, denouncing the claims in a statement as a "malicious falsehood."

The complainant, who made the allegations in a meeting with Commissioner for Standards Elizabeth Filkin, said the money was given to Vaz's parliamentary office when he was Opposition spokesman for the inner cities.

Filkin said she had received a formal complaint that she is now investigating. But she noted, "An investigation does not mean there is any proof of wrongdoing."

Vaz, 43, is accused of having failed to declare thousands of pounds in cash payments in the MPs's register of interests.

The complainant, who worked for five years at Zaiwalla & Co and now has his own law firm, alleges that an intermediary for Vaz collected 2,000 pounds in cash for the MP in 1994. He alleges that further payments were also made at Vaz's request.

Vaz, who was in India last week on an official visit, said in his statement that he was fully confident of refuting the allegations which he described as "utterly without foundation".

Zaiwalla, who used to represent the Indian government, has also firmly rejected the allegations that he made any payments to Vaz.

Filkin has written to the complainant asking for the identiies of other employees said to have information about the alleged payments.

The allegations were a further unwelcome blow for Tony Blair's Labour government, which has been mired in a controversy surrounding the business career of former paymaster-general Geoffrey Robinson.

Vaz was at the centre of a diplomatic row during his visit to India after reports in British newspapers that Indian visitors to Britain would be forced to post 10,000 pound bonds to ensure that they leave the country.

It is the second time in two years that Zaiwalla's firm has been in the news over allegations of political favours. Last year, newspapers had reported financial links between the firm and former Conservative agriculture minister Tony Baldry who helps Zaiwalla to organise regular 'Asian Business Breakfasts' in the House of Commons.

Filkin advised Baldry to register his links in the parliamentary register, which he promptly did.

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