BAT, the single largest shareholder in tobacco major ITC, is yet to take a final decision on whether it would join ITC or go alone in formulating its defence against the Enforcement Directorate's (ED) show cause notices in the alleged Fera violation case.
Sources close to BAT said yesterday the UK tobacco major was still studying the points raised by the show cause notices, particularly since issues like Fera were basically unknown in the UK. There is no firm decision as yet on how they would approach the issue, sources said.
The UK tobacco major, whose representatives on the ITC board had also been showcaused by the directorate, tended to look at the inclusion of the non-executive directors in the affair as a move to make the ITC issue an example, sources said. The inclusion of the financial institutions in the list of those showcaused leads BAT to believe that ED is setting an example with the case, sources pointed out.
According to the source, during the earlier ITC management, BAT had been vigilant and had raised the aspect of financial irregularities even at that time.
The UK shareholder had also been calling for a special audit committee as well, the sources pointed out.
The enforcement directorate is currently investigating alleged violations of the Foreign Exchange Regulation Act in connection with certain export transactions between the company and USA-based Chitalia group of companies during the year 1990 to 1995.
The ED had questioned representatives of the UK-based buyers of leaf tobacco Standard Commercial and Intabex for clarifying suspicions of underinvoicing on these fronts.
During the course of investigation, the enforcement directorate officials have also questioned a number of persons and recorded statements with regard to transactions carried out by ITC Global, the company's wholly-owned subsidiary.
The customs authorities also carried search and seizures in ITC's Indian Leaf Tobacco Division based in Guntur, Andhra Pradesh.
"The investigations by the directorate and the customs authorities are continuing and the company has been extending the fullest co-operation in the matter", added company officials.
