Bat Export Payments To Itc Routed Via Singapore

The Singapore companies are the same ones that are now locked in legal disputes with the Chitalias who, in turn, have offered to cooperate with the Enforcement Directorate in investigating possible FERA violations by ITC.

BAT's involvement in the Singapore companies has surfaced in documents available with official sources who are investigating the matter. The documents show that while the tobacco shipments were made from India, payment was routed through Singapore. The documents suggest that the bills raised by the Singapore companies on some transactions (that may or not involve BAT) may have been higher than the export price from India.

 

The two Singapore companies are ITC Global Holdings and ITC World Trade Corporation. ITC Global has subsequently lost some $ 40 million and is in danger of being wound up if funds cannot be transferred to it from India. The second company, ITC World Trade Corporation, is understood to have a paid-up capital of two Singapore dollars, both held by ITC employees. The parent company itself has no shares in the company. Transactions through this company, involving ITC and BAT, ran into millions of dollars.

When contacted in London, Simon Smith, a BAT nominee as director of ITC, said he would not be able to comment on the documents until he had a look at them. Smith said he was not a "leaf man", and as the documents related to an earlier period, there was no way in which he could respond, without talking to the tobacco leaf people in BAT. When asked to confirm whether BAT had routed payments to ITC Global Holdings in Singapore, Smith said: "I do not know about them." He said as far as he was aware, BAT used to buy tobacco directly from ITC.

Documents available with the investigating agencies include a telex message purporting to be sent by S H Beamish to R Ranganathan in ITC. This says: "I have today been advised by Robin Davis, Batuke (BAT UK Exports) that they are prepared to pay for all future tobacco purchases from ILTD (India leaf tobacco division) via ITC Global Holdings Pte Ltd in Singapore by telegraphic transfer on receipt of shipping documents. In order to speed up the payment for you, a faxed copy will be acceptable. It is now up to your people to liaise with Batuke to get this new system working."The indication that the Singapore company was indulging in price mark-ups for goods exported from India comes in the form of a fax message to VSN Murthy of ITC in India from Amrit Bindra of ITC Global in Singapore.

The fax says: "I am holding two sets of documents for Intabex. Please confirm if ITC Global Holdings Singapore's invoice for the buyer is to be 50 cents higher than your invoice to ITC Global. I do not have any contract numbers for your reference. The details of the two invoices are as follows..."

BAT has over the past two years been asking for an inquiry into the affairs of ITC Global. The documents available with Business Standard suggest that information about ITC Global was being passed on to BAT while being withheld from the financial institutions.

A note dated 5 September 1995 to R Pilbeam from A G (presumably Ashutosh Garg, who was till a year ago head of ITC Global Holdings) says: ".... Regarding current account dues between ITC Ltd and ITC Global, I misunderstood the question and I am giving below the dues ... I am not sure whether to raise these points at this meeting since the institutional directors are not aware of these items as some of them could be of a sensitive nature." Garg, as it happens, was one of the two people who paid for the initial share capital of ITC World Trade Corp.