Dow AgroSciences blacklisted for bribing

The following article was published on September 18:

The Economic Times of India

NEW DELHI: The Centre has blacklisted Dow AgroSciences India for five years for bribing government officials to expedite registration of three pesticides in the country. 

The order to ban Dow AgroSciences, a subsidiary of US-based Dow Chemicals, from undertaking any commercial activity in India for a five years has been approved by agriculture minister Sharad Pawar on Thursday, a senior ministry official confirmed. 

“The company was given enough time to furnish its reply. We went through their reply. The whole thing was examined in great detail by the ministry. We have arrived at a judicious decision,” the official said. 

A Dow AgroSciences representative said the company has not received any word from the ministry so far. “We haven’t received any communication in this regard from the ministry. I have no idea about the decision,” said Dow AgroSciences vice-president Rakesh Chitkara. 

According to its company website, DowAgroSciences India provides pest management, agricultural and biotech products. Its existing product range includes insecticides, herbicides, fungicides, plant growth regulators as well as non-crop and household pesticides. 

CBI, which had investigated the case, had earlier this year held the Mumbai-based Indian arm of Dow Chemical Company guilty of bribing a senior central government employee and his aides, and had recommended that the firm be black-listed for pursuing corrupt practices. 

The firm had been slapped with a notice by the agriculture ministry on June 22 this year to show cause as to why it should not be blacklisted for indulging in unethical practices. The three pesticides were identified as Dursban 10G, Nurelle-D and Pride. 

The details of the bribes paid by Dow AgroSciences India (earlier called 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 Chemical to establish payment of bribes during 1996-2001 by Dow AgroSciences,” CBI spokesperson Harsh Bhal had told newspersons in June this year. 

The US Securities and Exchange Commission (SEC) in 2007 had fined Dow Chemical $325,000 for bribing the officials in India to fast-track permission to sell their pesticide brands. 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. 

Dow AgroSciences in a recent statement said misconduct of the employees of DE-NOCIL was detected via an internal investigation. The Dow Chemical Company made voluntary disclosures to SEC in the background of its internal investigation to promote fair and ethical practices. 

“Following the investigation, De-NOCIL took significant personnel actions against those individuals who appeared to be, either directly or indirectly, responsible for apparent improper conduct with government officials in India. The services of four DE-Nocil employees were terminated and two resigned on their own since termination was imminent,” added the statement. 

A CBI team investigating the case had 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 by Dow AgroSciences. The company had also picked their travel and hotel expenses. It later filed charge sheets against Rajak, and a middleman, in the court of a special judge in Ambala (Haryana) for accepting bribes from Dow Agro. 

Mr Kevin Aden, then managing director of Dow Agro, who is a British citizen, according to CBI, was in the know of these transactions as the bills raised in the firm bore his signature. He, however, evaded CBI questioning as he had left India, and, hence, could not be chargesheeted.

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