Panel to probe Volcker charges

Virendra Dayal, former UN under secretary-general, appointed special envoy to head probe.

Amid deepening political crisis over the controversial Volcker Committee report, the government announced the appointment of Virendra Dayal, former UN under secretary-general, as special envoy to head a probe into the alleged payoffs to External Affairs Minister K Natwar Singh, the Congress Party and other entities in the oil-for-food programme for Iraq.

Dayal's appointment would be for an initial tenure of three months or until the completion of the inquiry, whichever was earlier, a statement issued late this evening by the Prime Minister's Office said.

It said the government was also contemplating "other steps", which would be announced shortly. Dayal is former chef-de-cabinet of the UN secretary-general (1982-92) and a former member of the human rights commission.

The announcement of the probe came three days after the United Progressive Alliance government said it would get to the roots of the allegations contained in the Volcker Committee report.

The statement said Dayal will be given full powers and authority to execute the responsibility given to him. Dayal will liaise with the UN and its members to gather relevant material, including those on unverified references made by the Volcker report.

Meanwhile, the enforcement directorate today launched a probe into the references made by the report. Directorate officials quizzed Andleep Sehgal, a friend of the external affairs minister's son Jagat Singh and partner in Hamdaan Exports, which was named by the report as a non-contractual beneficiary in the oil-for-food programme.

Sehgal was said to have been questioned for a good length of time. Simultaneously, enforcement directorate and income tax officials conducted searches at Sehgal's home and office.

Earlier in the day, the third time in the last three days, Congress President Sonia Gandhi drove down to the Race Course Road residence of Prime Minister Manmohan Singh to hold discussions on how to go about the probe and prevent any further damage to the image of the party and the government.

A core group of ministers, comprising Finance Minister P Chidambaram, Defence Minister Pranab Mukherjee, Home Minister Shivraj Patil, Law Minister HR Bhardwaj and Human Resources Development Minister Arjun Singh, and Political Secretary to the Congress president Ahmad Patel also attended the meeting.

Shortly after this meeting, K Natwar Singh arrived at the prime minister's residence and held discussions for around 90 minutes. The external affairs minister, who had ruled out the possibility of his resignation, said the discussions were on the Volcker report and its "unsubstantiated references" and also on pressing foreign policy matters.

The external affairs minister appears determined to fight it out till the last gong. At a CII conference here this evening, he questioned the US understanding of the Muslim psyche and its policies vis-à-vis Iraq.

"If the world has to be peaceful and friendly, the US has to take cognisance of the psyche of Muslims. The Congress party continues to be opposed to the US policy in Iraq. Nothing will prevent us from saying the truth," he said.