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Ex-Minister’s Graft Conviction Threatens to Engulf Indian Officialdom
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| Sukhram flanked by court and police officials. |
By IOL South Asia Correspondent
New Delhi, July 5 (IslamOnline) - On
the unfolding “Xeroxgate” scam, which threatens face of Indian
bureaucracy, former central communications minister Sukhram was
convicted Friday, July 5, by a Delhi court for defrauding the
Government of India of rupees 16.8 million in a telecom deal.
Special Judge VK Jain sentenced
Sukhram to three years of imprisonment and a fine of rupees 100,000
after finding him guilty of a criminal conspiracy to defraud the
exchequer by buying inferior telecom equipment on inflated rates.
The court also convicted deputy
director general in the telecom department, Runu Ghosh, and the
managing director of the offending firm, Rama Rao. Ghosh got a two
year jail term and a fine of Rs 50,000, while Rao was slapped with
three years of imprisonment and a fine of Rs 200,000. The three were
granted bail and allowed time till August 5 to appeal against the
verdict.
Meanwhile, the unfolding Xeroxgate
loomed larger in the background as the latest scam involving public
officials in India. The U.S.-based Xerox Corp revelation about
“improper payments” to Indian government officials expose
corporate India’s routine practices in its dealings with Indian
bureaucracy.
Lax accounting conceals bribery in
India. The case of Xerox Corp’s Indian subsidiary Xerox Modicorp
came to light only because Xerox had to explain the anomaly in its
books to the U.S. Security Exchange Commission which demands strict
accounting procedures.
Xerox Corp said that the Indian
subsidiary made “improper payments” of $700,000 to government
officials to push equipment sales to government offices. Xerox
Modicorp chairman Jule E Limoli said here Friday that they had made
“voluntary submissions to US and Indian authorities.”
On Thursday, Finance Minister of
India Jaswant Singh ordered a high-level probe into the affair that
threatens to snowball into a major scam. Xerox Corp has a 68 percent
equity stake in Xerox Modicorp. An explanation has yet to come from
the BK Modi Group, the Indian partners in Xerox ModiCorp.
Corruption is rife in Indian
government deals. Major scandals have come to light over the years in
defence purchases. Some of the more notorious ones are related to
purchases of Bofors howitzers from Sweden, HDW submarines from Germany
and Boeing civilian aircraft from the U.S.
Some of the largest bribes have been
paid in infrastructure development like roads and bridges. An example
of undesirable business practices was the Enron deal which India
ultimately cancelled. The American Energy giant finally collapsed
under the weight of its own malpractices.
A Transparency International report
said last month that Japanese and Western companies had been resorting
to bribery in the developing world to get business contracts. Such
practices are not allowed in their own countries.
The Transparency International report
put U.S. and Japanese companies ahead of others in bribing Third World
government officials. French, Spanish, German and British companies
came after them. The least involved in bribery were Australia, Sweden,
Switzerland, Austria, Canada, Netherlands and Belgium.
What has emerged so far could just be
the tip of an iceberg of graft. Xerox Corp has already admitted
overstating sales and profits and has brought down its pre-tax profits
by $ 1.4 billion over the 1997-2001 period. Xerox Corp has admitted to
Securities Exchange Commission overstating equipment sales by $6.4
billion.
Xerox Corp, which was earlier fined
for lax accounting, may have to revise its books showing sales in one
year to be booked in another year. It told in its filing to the
Securities Exchange Commission that certain transactions by its
officials in South Africa might also have been improperly recorded.
Revelation about Xerox Modicorp
bribing Indian officials has brought into focus the propensity for
bribery in this country. Out of a reckoning of 91 countries for
official corruption made by Transparency International, India figures
among the most corrupt. In terms of probity it stands 71st among 91
countries, the least corrupt being Finland, Denmark, New Zealand,
Ireland, Singapore and Sweden.
Out of a score of 10 Finland got 9.9,
Denmark 9.5, New Zealand 9.4 Ireland 9.2, Singapore 9.2 and Sweden
9.0. The United States stood at 7.6 alongside Israel, which also got
the same score. India got a score of 2.7 and was in the company of
Kazakhstan and Uzbekistan which had the same score.
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