rediff.com: Modis blame Xerox for bribery woes

The Modis virtually held US partner Xerox Corp responsible in the bribery scam in joint venture Xerox ModiCorp and said they were extremely concerned about allegations made against group company SpiceCorp's nominees in the joint venture.

"The recent disclosures by Xerox to the SEC (Securities and Exchange Commission), USA and the subsequent submission of the relevant sections to the Indian government is something that Xerox has done pertaining to its day-to-day operations in India," chairman of SpiceCorp Veena Modi said in New Delhi on Thursday.

Xerox made a voluntary disclosure earlier this month that its Indian subsidiary Xerox ModiCorp made "improper" payments of $700,000 to Indian government officials in the year 2000 to promote business, following which the Department of Company Affairs ordered a thorough probe into the Indian venture.

In its first reaction, the Indian partner, which holds about 25 per cent stake, said: "SpiceCorp is extremely concerned about the allegations being made against the SpiceCorp nominees and the Indian government."

As part of efforts to come clean on the controversy that broke about three weeks back, Modi said: "We have initiated the immediate appointment of Ernst & Young as the internal auditor of XMC. They will examine and audit the company's books, accounts and records".

SpiceCorp holds the largest 18.19 per cent "effective" stake in Xerox ModiCorp while another seven per cent is held by other associate companies, she said.

The appointment of E&Y as the new internal auditor would allow for an independent examination of PricewaterhouseCoopers report, which was quoted by various sections of the media and which has also been submitted to DCA.

The chief financial officer of the joint venture S Venkatraman is incidentally a SpiceCorp nominee besides senior vice-chairman O P Dani, according to Modi.

Asked about reports that DCA will now launch an investigation into all B K Modi group companies, Veena Modi said: "We believe that in the present context it is important to know that SpiceCorp has nothing to do with the other Modi group companies and is being professionally managed by an eminent board".

On whether the Modis would exit the joint venture, she said: "Modis will always keep the interest of its shareholders and customers supreme. The aim of our management is to constantly create value and to this end we shall take whatever steps the board thinks necessary".

Asserting that the Indian partner was fully cooperating with all investigating agencies in the national interest, she said, "We would be very happy to see the investigation follow its due course and the persons responsible for the current situation brought to task."



Home > Money > PTI > Report July 25, 2002 \| 1649 IST		Feedback