Ed Grills Itc Audit Official Vaidyanath

ITCs executive vice-president (internal audit) K Vaidyanath was interrogated yesterday by the enforcement directorate for the first time in the second round of investigations relating to the alleged $100 million Fera violations case. Director R K Kutty was also interrogated during the day.

ED sources feel that questioning Vaidyanath is valuable, as he, along with the ITC chairman Y C Deveshwar, had for the first time admitted that Fera violations had continued for the first four months of 1996 in the Indian Leaf Tobacco Division at Guntur, Andhra Pradesh during interrogations in December 1996.

This period coincides with the first four months of Deveshwars tenure as chairman.

 

Deveshwar has however been given the clean chit by the ED and is currently in London to sort out details of the proposed joint venture with parent shareholders BAT. Sources point out that Vaidyanaths statement has been recorded thrice earlier, but some more questioning is essential to corroborate certain clues from information that pours in almost everyday from Guntur, from the customs authorities who are in charge of investigating the case from that end.

ITCs internal audit department has already determined that Fera violations in the ILTD to the tune of $2 million had taken place between 1991 and 1996.

The ED is trying to verify the veracity of this audit. The violations were committed through alleged under-invoicing of exports of tobacco leaf.

It is believed that Vaidyanath will be quizzed on other issues such as alleged over-invoicing of machinery from Italian firm Garoma Anstalt, siphoning of $4 million to two US-based NRIs R P Alturi and Veluchamy for the loss-making Bukhara restaurant and several other allegations of dubious agri-commodities overseas dealing. The ED plans to hold interrogation sessions for the whole of February. Sources feel that a clear picture will emerge by the end of February. Only then will it be decided when the case will be finally resolved.

ITCs director R K Kutty is being interrogated almost everyday in the second round of investigation.

It is believed that he has been pinpointed as a key factor in the case. and his grilling mainly involves the Singapore-based subsidiary ITC Globals overseas dealings as well as the dubious basmati rice exports in the international business division. Most of the interrogations are based on the Lovelock & Lewes report prepared on the IBD for 1995.