Xerox admits India pay-offs

Xerox's own documents have come under increasing scrutiny

Xerox, once the king of photocopiers, has admitted its Indian subsidiary made "improper payments" to win government contracts.

We estimate the amount of such payments in 2000, the year the activity was stopped, to be approximately $600,000 to $700,000

Xerox

"In India, we learned of certain improper payments made over a period of years in connection with sales to government customers by employees of our majority-owned subsidiary in that country," the company said in its delayed annual report filed with the US Securities Exchange Commission last week.

Xerox, whose motto is "there's a new way to look at it", also restated five years of results in the report in another US corporate accounting scandal.

The company holds a 68% stake in its Indian unit, Xerox Modicorp.

The filing said Xerox stopped the payments in 2000 when it became aware of them.

Facilitating payments

"We estimate the amount of such payments in 2000, the year the activity was stopped, to be approximately $600,000 to $700,000," the company said.

Xerox plans to notify the US Justice Department and the Indian government about the payments, Paul Arrowsmith, Xerox's spokesman for the Middle East, India, Euroasia, Russia and Africa said in the report.

Payments of $100-200 were made to Indian government officials to clinch orders, the report said.

The Foreign Corrupt Practices Act prohibits US companies from bribing foreign officials but allows small payments, also known as facilitating payments, if they are necessary to do business in other countries.