After Xerox Corporation admitted in a report filed with the US Securities and Exchange Commission that its Indian subsidiary, Xerox Modicorp, made "improper payments" to secure government contracts, the Indian income tax department carried out searches yesterday at 23 of the company's locations across the country. In addition to corporate offices, the homes of some company officials were searched. The searches were carried under section 132 of the Income-Tax Act.
Officials said that the searches weren't however directly related to the bribery allegations, but were aimed at discovering the source of the funds used. The department alleges that Rs 25m of tax evasion has taken place.
This latest scandal follows a review by PricewaterhouseCoopers ordered by the Government earlier this month after the company's admission that it made US$700,000 of 'improper payments' to government officials in the year 2000.
Xerox Modicorp is owned 68% by Xerox Corp, 28% by B K Modi, and the balance is publicly held.
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