New Delhi, July 03: The Xerox-Modicorp scam snowballed today with government ordering a probe into its accounts following admission of improper payments of 700,000 dollars to government officials in 2000 to promote business even as CBI swung into action to gather intelligence about the beneficiaries of bribery.

Within a day of US-based Xerox corporation's admission of 'improper payment' by its Indian subsidiary coming to light, department of company affairs secretary V K Dhall told a news agency "we have ordered inspection of accounts to ascertain the facts as reported by the company itself." In view of the mention of bribes to government officials, CBI sources said that once a definite information was gathered, a suo-motu action could be taken against the beneficiaries under prevention of corruption act.
Dhall's statement came after Xerox Corporation said it was notifying the Indian government about the 'improper payments' made to officials by its Indian subsidiary Xerox Modicorp for pushing sales. The DCA probe into Xerox-Modicorp, where the us giant has 68 per cent equity, under section 209 a of the companies act would be completed expeditiously, Dhall said adding that "inquiry would be focussed and limited."
Meanwhile, Xerox spokesperson Paul Arrowsmith said that his company was not planning to buy out its local partner, from whom the us giant had acquired majority stake three years ago, to prevent such unethical practices, according to news agency Dow Jones.
Bureau Report