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CBI closed case 2 years ago, now Australian probe says $2.5m commission was paid for wheat to India in 1998

CBI closed case 2 years ago, now Australian probe says $2.5m commission was paid for wheat to India in 1998

Author: Ritu Sarin
Publication: The Indian Express
Date: May 22, 2006
URL: http://www.indianexpress.com/story/4900.html

Introduction: Gujral govt was in power: Payment made into Cayman Islands account by Australian Wheat Board, say documents with team probing AWB role in oil-for-food scandal; Australian A-G office says we followed up CBI request, but 'no further action' was sought

An Australian investigation into the Iraqi oil-for-food programme has come up with documentary evidence to show $2.5 million (Rs 11.25 crore) was paid as commission in a 1998 India wheat deal.

The import of wheat from Australia was the subject of a CBI inquiry which was formally closed two years ago for alleged lack of documentary support from the Australians.

But documents which now form part of a probe by Commissioner Terence Cole into illegal payments made by the Australian Wheat Board (AWB) to Saddam Hussein's Iraq link AWB to corrupt deals in other markets, including India.

Incidentally, AWB is at the centre of a new row over the UPA government's fresh wheat imports. Of the 500,000 tonnes ordered from Australia, 100,000 tonnes have already arrived in India.

According to reports published in The Age (Melbourne) and The Sydney Morning Herald, Commissioner Cole has obtained documents which show that AWB paid $2.5 million as commission to a bank account in the Cayman Islands as part of an order for export of two million tonnes of wheat to India's United Front government in February, 1998.

It is not clear who AWB paid in the Cayman Islands and why.The contract in question is the Rs 1,200 crore import deal finalised during the last days of the I K Gujral government. The NDA government, which came to power thereafter, ordered a CBI inquiry. But the agency formally closed its case in 2004 for alleged lack of document support from Australian authorities.

But revelations in the Australian media indicate that AWB officials were aware, since October 2001, they had documents linking the wheat import to the pay-off scandal.

This link emerged because documents supplied to Commissioner Cole by former AWB chairman Trevor Flugge show that in October 2001 (a month after the CBI asked the Australians for assistance in investigations) AWB's ex-Chief Executive, Andrew Lindberg, informed the company's Directors that they had traced a money trail linking the Indian contract to commissions paid to a company in the Cayman Islands.

This is what Lindberg has been quoted as having told the AWB Board in his lengthy report: "AWB's searches to obtain information have uncovered documents alluding to a payment of a commission or rebate of US $2.5 million to a company in the Cayman Islands... The Commission Agreement has not been located although there are suggestions that such a document did exist."

According to The Age and Sydney Morning Herald, an embarrassed AWB has begun an exhaustive internal probe and is scrutinizing all correspondence and emails pertaining to the Indian contract of the pre-1998 period, when the company was still owned by the Australian government.

As reported by The Indian Express, it was on September 11, 2001 that the CBI converted its Preliminary Enquiry (PE) into the wheat import to a formal FIR. The FIR named three top bureaucrats: former Cabinet Secretary T S R Subramanian, former Food Secretary B K Taimni and former chairman of State Trading Corporation S M Dewan.

The CBI waited six months for documents from the AWB and then filed a Letter Rogatory (LR) via diplomatic channels to Australia, also to ascertain whether any broker was involved in the contract or any commission paid.

The CBI's FIR had alleged that the bureaucrats had ordered the wheat import without taking proper stock of the country's procurement situation, that the import served "no public interest" and that the bureaucrats had "caused undue pecuniary benefits to themselves/others."

"The accused persons, by their acts of commission and omissions as well as abuse of official position, caused huge pecuniary loss to the Government running into more than Rs 1,000 million (Rs 100 crore) and corresponding gain to the AWB... The said wheat could not be made use of profitably and it was imported without real requirement and some of it had to be sold later on as a distress sale by the FCI," concluded the FIR.

Incidentally, in comments to The Age and Sydney Morning Herald, a spokesperson of the Australian Attorney General informed that "appropriate inquiries" were made by Australian authorities when the CBI's request came and that subsequently, "no further action" was requested of the Australian government. The spokesperson is quoted as saying that the AG's office has handed over all documents of India's "defunct investigation" to the Cole inquiry.


CCEA cleared the import, wheat landed when Vajpayee was PM: Gujral

o I K Gujral, former Prime Minister: The wheat import was cleared by the CCEA which the Finance Minister headed. While the import was ordered during my tenure as Prime Minister, the consignments landed when Atal Behari Vajpayee was PM. If any further revelations have been made, I am happy about it.

o T S R Subramanian, former Cabinet Secretary: As Cabinet Secretary, I only recorded a decision taken by six Cabinet Ministers. The CBI wasted several years in its probe and found nothing. The Cabinet Secretary was not involved in choosing the STC for executing the imports.

o P C Sharma, former CBI Director: We hardly got any help from the Australians when we asked for assistance but they appear to have revealed a lot to their own inquiry team. A CBI Director visited Australia for the probe. In the end, we had no option but to close the case.

-ritu.sarin@expressindia.com


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