Itc Seeks Time To Answer Chitalias

Suresh and Devang Chitalia, ITC's former US partners, are asking for more than $55 million in damages from the Indian company as compensation for allegedly hurting their business reputation and as unpaid charges for a series of soured business deals.

ITC and its international subsidiary, ITC Global, were required to file their reply to the Chitalias' counterclaim in court this week.

ITC, however, asked for an extension, and will now file its reply by October 1.

The delay leaves open the possibility that ITC may strike an out-of-court compromise with the Chitalias.

There are always discussions, Chitalias' lawyer William Handler said cryptically, when asked about the possibility of arriving at an out-of-court settlement with ITC.

 

Lawyers from both sides will meet the judge in the New Jersey court on September 27 for a routine conference to review the status of the case.

Handler did not confirm or deny reports that the Chitalias had sought immunity from the Indian government in exchange for testifying about ITC's alleged financial irregularities in its international ventures.

According to reports, the finance ministry is mulling over the Chitalias' offer now.

The Indian tobacco major had sued the Chitalias for nearly $16 million in damages late last year, claiming compensation for alleged advances that had not been repaid.

The case, however, turned messy with the Chitalias meeting ITC's accusations with a series of counter-allegations involving the creation of fictitious corporations to bypass Reserve Bank of India regulations.

ITC and the Chitalias were collaborating on a string of ventures, including commodity trading, ship-breaking, and cigarette marketing as recently as last year.

The partnership primarily centred on ITC's attempts to break into the American market, but also included at least one Singapore-based concern.

ITC's lawyers in the US did not return phone calls.