US firm bribed Indian Public Sector Undertakings

Press Trust Of India
Washington, July 07, 2010
Officials of Indian PSUs like BHEL and NTPC appear to be the beneficiaries of bribes that were doled out by a California-based valve company to bag lucrative contracts, mostly for tools used in the construction of power plants. Prominent among these Indian companies are Bharat Heavy Electricals Ltd, Maharashtra State Electricity Board, Haryana State Electricity Board, National Thermal Power Corporation and Bhilai Electric, according to documents submitted by the US Department of Justice before a US court.

It is possible that the details of the beneficiaries are listed in the sealed court documents, but no names were immediately known.

California-based Control Component Inc (CCI) on June 31, 2009, pleaded guilty before the US court to having committing bribery in 36 countries from 2003 to 2007.

India, besides China, the UAE and Qatar, are some of the major countries where Control Component Inc indulged in unfair practices to bag contracts.

According to court documents, the payments related to India were made between 2004 and 2007. Topping the list is the Sipat coal-fired power plant of NTPC, for which CCI paid a bribe of $163,449 in two installments to an official of a Moscow-based company, who has been identified as Vladimir Batenko in the documents submitted by the US Department of Justice before the US court.

On Tuesday, the US Department of Justice announced that it has extradited Flavio Ricotti, a former executive of CCI on charges of bribing foreign companies.

An Italian national, Ricotti, was arrested on February 14 in Frankfurt, Germany, and arrived in the United States on July 2.

The alleged bribe for the Sipat thermal power plant was paid in two installments. The first payment of $26,865 was made on November 29, 2005, from the company's Handelsbanken Bank account in Sweden to an account at Dresdner Bank in New York for the purpose of securing the contract for the Sipat thermal power plant.

The second payment of $136,584.98 was made in October, 2006, from the same Handelsbanken Bank account in Sweden to an account at the Baltic International bank in Latvia, the FBI alleges, for the purpose of making a corrupt payment to a Company 3 employee with regard to the Sipat thermal power plant in India, the DOJ said.

According to court documents, the CCI -- in two installments on November 6, 2006 and January 9, 2009 -- made a total payment of $69,012 to BHEL and MSEB.

BHEL officials are reported to be the beneficiaries in several other instances, but most of the amounts are less than $5,000.

In 2007, officials of the Bhilai Electricals are believed to have received $8,600, while those of HSEB received $15,802 through a transaction on July 7, 2007.

In addition, Spin Industries, J Mehta & Co and MSEB were the beneficiaries of another bribery transaction of $15,000 made by CCI on March 3, 2004.

However, the court papers are not clear, how many of these contracts were bagged by CCI and what was the value of the contracts it won.

The Department of Justice said CCI has admitted that from 2003 through 2007 it made approximately 236 corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to these corrupt payments.

NTPC denies
However, in a statement sent to Hindustan Times, NTPC has strongly objected to its name being taken in the news report. The NTPC said that they have not placed any direct order with the Control Component Inc for the Sipat Project. NTPC also said that it is not a party in the contract between any of the Manufacturers and its equipment suppliers i.e. the said party Control Component Inc (CCI).
US firm bribed Indian PSUs
Comment
Swiss Banks secrecy laws makes it it convenient for non- detection of the Money Laundering route. Bureaucrats and Politicians are the beneficiaries of all such ill gotten wealth transferred to foreign countries.