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Xerox
Faces Corruption Exposure in India
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BK
Modi, Modi Corp chairman
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By
IOL South Asia Correspondent
New
Delhi, July 22 (IslamOnline)- As the affairs of the U.S.-based Xerox
Corp get murkier, its Indian subsidiary Xerox ModiCorp’s (XML)
management is getting into trouble with new exposures of inappropriate
book-keeping practices and corruption.
Earlier
this month, the accounting firm PricewaterHouse Cooper came up with
the finding that Xerox ModiCorp had made “improper payments” to
secure government contracts. Now comes the devastating revelation that
the company had, in fact, paid itself by making payments in the name
of fictitious firms.
These
“firms,” on their part, deducted five percent of the amount and
returned the rest to the XML. XML made substantial payments in cash as
well as by bank drafts in this manner.
PWC
made detailed investigation into XML’s affairs following the
discovery that something was wrong with its book-keeping. The
accounting firm has submitted its report to the U.S. Department of
Company Affairs (DCA).
The
fictitious Indian companies were paid charges like
“commissions", "discounts" and "handling
charges". The five percent deduction paid thus were not accounted
for in XML’s books. Erstwhile ModiCorp chief BK Modi has refused to
comment on the developments.
As
much as Rs 30.6 million was paid in bribes by XML. In another
development, the income tax department recovered Rs 11 million in
unaccounted for cash during raids on around two dozen XML offices
across the country last week.
It
also found unaccounted for investments in shares and fixed deposits
worth nearly Rs 10 million.
The
income tax officials also found tax evasion of Rs 250 million - Rs 50
million for every year of its existence. The DCA has asked XML to
submit its accounts by Tuesday, July 23.
The
central government in New Delhi had ordered a probe on July 3
following disclosures of “improper payments” to government
officials by XML.
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