The income tax department today carried out searches at 23 premises of Xerox ModiCorp Ltd across the country in response to allegations that the company paid bribes to government officials to procure orders.
In a separate development, the department of company affairs (DCA) approached the Company Law Board seeking powers under Section 237 of the Companies Act to launch investigations against Xerox ModiCorp. Under Section 237, the government can appoint inspectors to investigate the affairs of a company. This will, however, require an order from the Company Law Board. The first hearing in the case is scheduled for tomorrow.
DCA had earlier ordered an inspection of the books of accounts under Section 209A.
Senior government officials said 20 offices of the company, including front offices and other entities, were raided by the I-T department in Delhi. The searches, which began at 8 am, were aimed at detecting if the company had concealed the source of the improper payments to the government officials. They said the sum could be about Rs 24 crore.
Searches were also carried out at Muzaffarnagar and Moradabad in Uttar Pradesh and in Kolkata, sources said.
Sources added the I-T department was looking into the accounts for the past six years under the block assessment system. While the premises of some of the senior executives of the company were searched, neither the house of the ModiCorp chairman, the company's Indian partner, nor the houses of the three US directors based in Delhi had been searched, the department said. Sources said they had reason to believe the documents required would be found in the business premises.
The searches were carried out after a review by PricewaterhouseCoopers which apparently pointed out gross irregularities by the company.
Meanwhile, the United States today ruled out any joint investigation with India into the recent accounting scandal of multinationals like Xerox but said it would cooperate fully with the Indian investigators.
