Dow Agro faces ban on bribery charge
Sep. 10, 2010
Dow AgroSciences India Ltd, the Indian subsidiary of Dow Chemicals, is likely to be blacklisted by the government following its persistent refusal to respond to show-cause notices over charges of bribery.
The agriculture ministry had asked the company why action should not be initiated against it for bribing officials to push three sub-standard pesticides in the country.
The Central Bureau of Investigation, which had investigated the case, had earlier this year held the Mumbai-based Indian arm of Dow Chemicals guilty of bribing a senior central government employee and his aides, and had recommended that the firm be blacklisted. The three pesticides were identified as Dursban 10G, Nurelle-D and Pride.
The details of the bribes paid by Dow AgroSciences — known earlier as DE-Nocil — have been mentioned in the charge sheet filed by CBI in the case.
The charge sheet was filed on the basis of information furnished by the US authorities to the Indian government in response to a letter rogatory, a formal request from a court to a foreign court for judicial assistance.
“The legal action comes after the letter rogatory was executed by the US government on November 17, 2008, to elicit information regarding vouchers of Dow Chemicals to establish payment of bribes during 1996-2001 by Dow Agro Sciences,” CBI spokesperson Harsh Bhal had told newspersons in June this year. Acting on CBI’s recommendation, Krishi Bhawan had issued show-cause notice some two months ago to Dow AgroSciences.
But the company has since then, according to senior government officials, employed stalling tactics. Instead of responding to the notice, it questioned the government’s jurisdiction in seeking action against it. It simultaneously sought a few papers and clarifications, which were duly provided to them. The company has failed to get back to the Centre after that.
The GoM looking into various aspects of the Bhopal Gas tragedy, in the meanwhile, had sought to know the status of the show-cause notice. The agriculture ministry, in its response, cited the result of the CBI probe into the case, and its recommendation that the firm be blacklisted. The ministry also pointed out that it had issued show-cause notice to the firm for pushing the three substandard pesticides, but the Dow subsidiary was yet to respond to the charges.
In an effort to cover all its flanks, the agriculture ministry had, before issuing the show-cause notice, also sought the views of the law ministry. The latter, in its response, asked it to take the registration committee on board.
The CBI team investigating the case had earlier found out that Ratan Lal Rajak, a former plant protection advisor to the government, and his aides had been paid $32,000 in cash and jewellery, while their travel and hotel expenses were also picked up by Dow AgroSciences.
It later filed charge sheets against Rajak and a middleman, identified only as Satyabroto, in the court of a special judge in Ambala (Haryana) for accepting bribes from Dow Agro. The then managing director of Dow Agro, who is a British citizen, and two firms linked with Satyabroto, Agro Pack and Crop Health Products, were also mentioned in the charge sheet for corrupt deals.
According to the CBI charge sheet, Rajak was a member of all the three committees of the Faridabad-based Central Insecticides Board and Registration that granted permission for the sale of DE-Nocil products in India.
The Dow scam was unearthed by the US Securities and Exchange Commission (SEC) in 2007. It had also fined Dow Chemicals $325,000 for bribing the officials in India to fast-track permission to sell its pesticide brands that are banned in the US and many other countries.
The SEC, in a cease and desist order to Dow on February 13, 2007, charged the company with violations under the Foreign Corrupt Practices Act (FCPA) for letting a subsidiary use funds for illegal activities in a foreign country. The order was passed after Dow voluntarily approached a commission staff with the results of an internal investigation of DE-Nocil.
The order said, “none of these payments were accurately reflected in Dows books and records,” adding that “Dows system of internal accounting controls failed to prevent the payments” in violation of the internal control provisions of the FCPA.
More from AgroNews
Subscribe to daily email alerts of AgroNews.