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I-T raids on Modicorp offices

By Our Special Correspondent

NEW DELHI JULY 17. The Government today tightened the screws on Xerox Modicorp with the Income Tax Department carrying out searches at 23 premises of the company in different parts of the country. Xerox Modicorp is currently facing charges of bribing Government officials in 2000 to procure order for its equipment.

Though the Union Finance Ministry was tight-lipped about the ongoing raids, field-level sources indicated that about 20 premises in New Delhi connected with the company were searched, while two places in Uttar Pradesh and one in Kolkata were also raided. The searches were being carried out under Section 132 of the Income Tax Act.

Xerox Modicorp is already facing a probe by the Department of Company Affairs, which is going into its accounts, following admission of improper payments to the tune of $7,00,000 to Government officials. The admission came from the its principal partner, Xerox Corporation, which said that in October 2000 it discovered that members of the senior management team of Xerox Modicorp had been engaged in a system which it believes was providing improper payments to the Government employees in connection with equipment sales.

Xerox Modicorp is a joint venture company in which Xerox gained majority shareholding in August 1999.

While the IT raids today are said to have covered the premises of some senior officials of Xerox Modicorp, neither the house of the Chairman of Modicorp, B.K. Modi who is said to be connected with the Vishwa Hindu Parishad (VHP), nor of the three American Directors based in Delhi were being searched. The raids are believed to have been carried out after the officials received the report of the internal auditor of the company, PriceWaterhouseCoopers, for 2000.

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