New Delhi: The names of 129 Indian firms — including a number of big names from the public and private sector — figure in the list of companies a U.N. panel says made "illicit payments" to the erstwhile Saddam Hussein government in Iraq in order to secure lucrative contracts for the supply of humanitarian goods during the years the country was under international sanctions.

Sums recovered

The final report of the Independent Inquiry Committee into the U.N. Oil for Food (OFF) Programme, released last week, says that a total of more than $1.5 billion was paid out as "humanitarian kickbacks" by 2,253 companies from around the world during the seven-year period when the programme was operational. It adds that in most cases, these sums were recovered by the firms concerned by incorporating the bribe as a mark-up in invoices presented to the U.N. under the head of "after-sales service fees" or "inland transportation fees." The inquiry committee was headed by Paul A. Volcker, former chairman of the U.S. Federal Reserve Bank.

While the bulk of the Indian firms listed in Table 7 of the report are alleged to have paid relatively small kickbacks — routinely pegged at 10 per cent of the total value of the contract executed — as many as 38 Indian entities are said to have made illicit payments of more than $100,000. Among these are: Ajanta Pharma, Alembic Chemicals, Godrej Boyce, Kirloskar Bros, Kirloskar Oil Engines, L.T. Intl, Mauria Udyog, Mohan Exports, NSIL Exports, PCP International, Priyanka Overseas, RITES, Tata International and V.N. Enterprises. (See the complete list below)

The Oil for Food programme, launched in December 1996, was an attempt by the U.N. to allow Iraq — which had been under international sanctions since 1990 — to export a limited amount of its oil and use the proceeds for the import of goods urgently required for humanitarian purposes. Both the export and import ends of the process were monitored by a committee of the Security Council called the `661 Committee' and all funds were routed through a U.N.-controlled escrow account. Despite these precautions, says the Volcker report, the Iraqi authorities devised mechanisms for earning "illicit income," primarily through levying charges of one kind or another for both the sale of oil and the purchase of goods.

Until the time the programme ended in May 2003, the Government of Iraq sold $64.2 billion worth of oil to 248 companies while 3,614 companies worldwide sold $34.5 billion worth of humanitarian goods to Iraq.

Of this, the Volcker report says, oil surcharges were paid in connection with contracts of 139 companies — amounting to a total of $229 million in surcharges, while "humanitarian kickbacks" were paid in connection with the contracts of 2,253 companies. `After-sales service' kickbacks totalled $1.02 billion, while another $0.53 billion was collected by the Iraqi government in "inland transportation fees."

The grand total of "illicit income" earned by the Iraqi government during this period is estimated by the Volcker panel at $1.8 billion. "After-sales service provisions were incorporated into contracts as a basis to inflate prices and permit contractors to inflate prices and permit contractors to recover from the U.N. escrow account amounts they had paid secretly to Iraq in the form of kickbacks," it noted.

After scrutinising all available documentary evidence in the Iraqi ministries and enterprises concerned, the committee sent notices to the impugned companies asking them to respond to the evidence that they had made illicit payments. According to information provided in the report, virtually none of the Indian firms listed provided a reply.

Apart from the corruption alleged at the import end, the Volcker report said oil sales were also used to generate illicit payments for the Iraqi government as well as for certain individual beneficiaries in several countries. Iraq, the report says, "selected oil recipients in order to influence foreign policy and international public opinion in its favour." Russian companies received nearly one-third of all oil contracts, while French companies came in second.

"Iraq's political beneficiaries often used little-known intermediary companies to enter into oil contracts for oil allocated to them, and then the oil was sold to an established oil company or trader. Oil companies and traders paid the intermediary company a premium above the U.N. official selling price. The premium was used by the intermediary in turn to pay the beneficiary or another person or entity designated to receive the funds."

`Non-contractual beneficiaries'

The report alleges that Iraq made oil allocations to four specific Indian "non-contractual beneficiaries": Natwar Singh, described as a "member of the Indian Congress party," Bhim Singh, the Congress Party, and Reliance Petroleum Ltd. Of these, it shows a total of 1,000,001 and 1,936,000 barrels respectively lifted by Masefield AG, a Switzerland-based oil trading company, from allocations made to the Congress and Mr. Natwar Singh respectively. The contract numbers

mentioned are M/10/57 M/09/120 and M/09/54.

In the case of Reliance, the report says a total of 15,780,000 barrels allocated to the Indian petrogiant were lifted by Alcon Petroleum Ltd., based in Lichtenstein and Switzerland. The contract numbers mentioned are M/09/35, M/10/17 and M/11/25.

Those that paid more than $100,000

Of 129 Indian firms listed in Table 7 labelled "Actual and Projected Illicit Payments on Contracts for Humanitarian Goods (Summary by Supplier)," those that are alleged to have made illicit payments of more than $100,000:

Ajanta Pharma: $199, 207

Alembic Chemicals: $178, 940

Angelique International: $924, 198

Ashapura MineChem: $174,533

B.B. Overseas: $606,170

Bommidala Exports: $125,480

Colrige Intl: $111, 240

Cosmos Intl: $313,292

Deccan Tobacco: $455, 299

Exim Tradelinks: $177,583

Flex Engng: $107,338

Godrej Boyce: $107, 633

IndoAsian Fusegear: $113,749

Iqbal Associates: $388,058

Jord Engineers: $128,841

Kirloskar Bros: $182,827

Kirloskar Oil Engines: $161,056

Kotsons Pvt Ltd: $258,317

L.T. Overseas: $672,583

Lucky Exports: $300,746

Man Industries: $598,587

Matherland Platt: $334,144

Mauria Udyog: $908,367

Metro Exporters: $171,585

Mohan Exports: $558,187

Northern Projcts: $721,188

NSIL Exports: $1,225,798

Paramount Communications: $622,724

PCP Intl: $1, 306,810

Priyanka Overseas: $2,014,821

RajRasni Exports: $387,521

Ranbaxy Labs: $145,828

RITES: $135,837

Sangam Steel Wires: $35,000

Tata International: $399,361

Tea Group Export: $143,070

United Phosphorous: $129,841

V.N. Enterprises: $1,161,080

Indian firms that are alleged to have made illicit payments of under $100,000:

A.Damiano, Advacne Ispat (India) Ltd, Advanced SpectraTek Pvt Ltd, AgroExim (India), AirPac Exports, Alcobex Metals, Allana Sons, Alved Pharma, Amaryllis Exports, Ambo Exports, Arihant Industries, ARS International, Ascot SRL, Asia Tea and Exports, Asutosh Enterprises, Axis Electrical, Bajaj Intl, Baker Oils, Balmer Lawrie, Batliboi Intl, Bharat Agencies, Boston Tea, C.I. Ltd, Cipla, Core Healthcare, Cosmique, Dishman Pharma, Dolphin Intl, Dr Reddy's Lab, Eastern Medikit, General Instruments, Gimpex, Glassco Lab, Global Exports, Gujarat Raffia, Harrisons Malayalam, HBL, Hydrodyne, Indian Immunologicals, Indian Intl, Integrated Fire Protection, Intera Global, Jain Irrigation Systems, Jayalakshmi Exports, JBF Industries, JFK Intl, Kanpur Plastipack, KEC Intl, Kejriwal Enterprises, LT Intl, Limtex, Longgulf Trading, Lyka Labs, Premier Rubber, Macleods Pharma, Manohar Brothers Capacitors, Midland Plastic, National Electrical Industries, National Standard Duncan, NEC Engng, Neptune Exports, Northwesztern Cachar Tea, Orient Intl, Oriental Science Apparatus, Qualitea, Rama Associates, Reliance Industries, S.S. Exports, Sara Services, Saraf Trading, Sehr Pumps, Serum Institute, Siewert Dholakia, STCO Marketing, Sumo Intl, Supra Business, Tea Time, Ananda Bag Tea, the Champdany Industries, STC, Thermax, TL Ltd, Unique Pharma, Upasco, Vishal Exports, W.S. Industries, WEB Overseas, Wockhardt, WPIL Ltd, Yamuna Gases, Yuvraj Industies.

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