Report of Justice RS Pathak Inquiry Authority

REPORT OF
THE JUSTICE R.S. PATHAK INQUIRY

AUTHORITY
IN THE MATTER OF
THE INDEPENDENT INQUIRY COMMITTEE REPORT
ON
THE UNITED NATIONS OIL - FOR - FOOD PROGRAMME
RELATING TO
CONTRACT NO. M/09/54 AND CONTRACT NO. M/10/57

REPORT
OF THE
JUSTICE R.S. PATHAK INQUIRY AUTHORITY

Introduction
1.0 The sanctions imposed by the United Nations against Iraq

consequent upon events which led to the ‘Desert War’ were found,
over time, to produce severe hardship and intense privation, to the
Iraqi people. In an attempt to relieve them against deprivation
caused by the shortage of food, medical supplies and other
necessities, the United Nations evolved a United Nations Oil-for-
Food Programme. Iraq was permitted on the one hand to enter into
contracts of sale of its oil and on the other to acquire humanitarian
goods for its citizens. However, a constant course of misuse of the
programme by the Iraqi authorities having come to light, the United
Nations constituted an Independent Inquiry Committee (the IIC) to
inquire into the various acts of illegality and malpractice.
2.0 In its Fifth and Final Report the IIC reported that the
Government of Iraq sold 64.2 billions of oil to 248 companies, and
in time, 3,614 companies sold $ 34.5 billion of humanitarian goods
to Iraq. In some cases, illicit surcharges were exacted in connection
with the contracts of 139 companies, and humanitarian “kickbacks”
were paid in connection with the contracts of 2,253 companies. A
set of eight tables identifying contractors and other actors of
significance to Programme transactions, such as non-contractual
beneficiaries of Iraqi oil allocations and parties that financed oil
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transactions were released by the IIC. Among them, Table-3
contained the following entries under the head: “Summary of Oil
Sales by Non-Contractual Beneficiary”:
Beneficiary: Singh, Mr. K. Natwar

Contracting Phase Mission Contract Barrels Barrels Note on SOMO
Country Country Allocated Lifted Allocation records.
Masefield AG 9 Switzerland M/09/120 2,000,000 Nil Member of Indian
Congress Party
Masefield AG 9 Switzerland M/09/54 2,000,000 1,936,000 Member of Indian
Congress Party
Beneficiary: India-Congress Party

Country: India
Contracting Phase Mission Contract Barrels Barrels Note on SOMO
Country Country Allocated Lifted Allocation records.
Masefield AG 10 Switzerland M/10/57 1,000,000 1,001,000
Surcharge Payments Associated with a Contracting Company

(Committee Oil Surcharge Table)
Masefield AG
Contract Contract Value Barrels Lifted Surcharge Levied
M/09/54 $ 46,224,516.90 1,935,892.00 $ 498,973.00
Information from SOMO Information from Iraqi Embassy or Bank Records
Named Payment Amount Bank or Named Payment Amount
Depositor Date Embassy Depositor Date
Andleeb Jordan Sehgal
Sehgal 3/13/2001 $ 60,000.00 National Bank Andleeb 3/13/2001 $ 60,000.00
Hamdan Jordan Hamdan
Exports 5/27/2001 $ 438,518.00 National Bank Exports 5/27/2001 $ 438,518.00
Total for Contract M/09/54 $ 498,518.00 $ 498,518.00
Masefield AG
Contract Contract Value Barrels Lifted Surcharge Levied
M/10/57 $ 16,808,457.40 1,000,896.00 $ 250,224.00
Information from SOMO Information from Iraqi Embassy or Bank Records
Named Payment Amount Bank or Named Payment Amount
Depositor Date Embassy Depositor Date

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Total for Contract M/10/57$ 250,022.00 $ 250,022.00
Entry Total $ 748,540.00 $ 748,540.00
2.1 It is apparent from the aforesaid data that Mr. K. Natwar Singh
has been shown as a Non-Contractual Beneficiary in respect of
Contract No. M/09/54 and the India-Congress Party has been shown
as a Non-Contractual Beneficiary in respect of Contract No.
M/10/57.
3.0 Creation of the Inquiry Authority and the Terms of
Reference
3.1 The Government of India decided to create an Inquiry Authority

to probe into the matter. By Notification No. 8/35/2005-E.S. dated
November 11, 2005 published in the Gazette of India –
Extraordinary, the Government of India in the Ministry of Finance
(Department of Revenue) constituted the Justice R.S. Pathak Inquiry
Authority, with the following Terms of Reference:
1. To inquire into the sources of information, materials and

documents that were available with the Independent Inquiry
Committee (appointed by the Secretary General of the
United Nations to investigate the administration of the UN
Oil-For-Food Programme) with reference to the Report
(including the Tables) of the said Committee pertaining to
contracts bearing number M/9/54 and number M/10/57 and
to give its opinion on the authenticity and reliability of the
said source, materials and documents, and whether, in its
opinion, the purported transactions in oil are genuine or not.
2. To inquire into the aforesaid information, materials and
documents, and any other material or evidence that may be
obtained by the Inquiry Authority, and to give its opinion
whether the references to Indian entities and individuals
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pertaining to contracts bearing number M/9/54 and number
M/10/57 are justified or not.
3. To inquire into the question whether any Indian entity or
individual received any money or other consideration from,
or paid any money or other consideration to, any
Government, agency, company, firm or individual in
connection with the purported transactions in oil under the
United Nations Oil-For-Food Programme pertaining to
contracts bearing number M/9/54 and number M/10/57.
4. To inquire into any other aspect or matter relevant to the
Inquiry pertaining to contracts bearing number M/9/54 and
number M/10/57.
5. To make any recommendations or suggestions that the
Inquiry Authority may consider necessary or proper.
4. Jurisdiction and Powers of the Inquiry Authority

4.1 By another Notification No. S.O. 1593(E) of the same date, the
Central Government acting under section 11 of the Commissions of
Inquiry Act, 1952 declared that certain specified provisions of that
Act would be applicable to the said Authority. They were sub-
section (4) of Section 3, Section 4, sub-sections (2), (3), (4) and (5)
of Section 5, Section 5A, Section 6, Section 9, Section 10 and
Section 10A. Notable among the provisions not included are
Section 8B and Section 8C. Section 8B entitles a person in whose
conduct the Commission considers it necessary to inquire or whose
reputation is likely to be prejudiciously affected by the Inquiry, a
reasonable opportunity of being heard in the Inquiry and to produce
evidence in his defence. Section 8C entitles a person who is referred
to in Section 8B or any other person whose evidence is recorded by
the Commission to cross examine a witness other than the witness
produced by it or him, to address the Commission and to be
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represented before the Commission by legal practitioner or by any
other person.
4.2 The Commissions of Inquiry Act, 1952 embodies a code of
provisions considered necessary for an inquiry conducted by a
Commission under that Act. An Authority set up under an order of
the Government for the purpose of making an inquiry into a definite
matter of public importance may be directed to apply only such of
the provisions of the Act as are made applicable to that Authority.
When the Government selects only some of the provisions of the
Commissions of Inquiry Act, 1952 and not others for application to
the said Authority, it is clear that the Government does not intend
that those other provisions should be applied to the said Authority.
When it was open to the Government to apply Section 8B and
Section 8C of the Act and it does not do so when selecting the
provisions which it considered should constitute the envelope of
power of the said Authority, it may be taken to have deliberately
excluded Section 8B and Section 8C of the Act from application to
the Inquiry before the Authority. Where a provision in the
Notification setting up the Authority empowers it to adopt such
procedure as it considers appropriate during the Inquiry, the
Authority must ensure that the contours of such procedure conform
to the limitations so imposed on it. In this view of the matter, it is
clear that this Inquiry Authority does not enjoy the power to permit
the cross-examination of a witness or representation by legal
practitioner or by any other person.
4.3 As to the status of the findings recorded by the Inquiry
Authority, it may at once be said that this is merely an inquisitorial
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proceeding and not an adversarial proceeding. This is not a trial of a
person accused of an offence or misconduct, where allegations are
made by one party against another. Such a trial entitles the accused
to cross-examine witnesses deposing against him. Such a person
would also be entitled to representation by a legal practitioner or by
other suitable person of his choosing. The inquiry entrusted to this
Inquiry Authority is not in the nature of a trial at all. It is merely an
inquiry into the facts of a particular matter by way of information to
the Government in respect of that matter. Keeping before it this
essential character of the inquiry and its attendant limitations, the
Inquiry Authority must, at the same time, ensure its adherence to the
principle of fairness. In the present Inquiry that was ensured.
Wherever the material on the record appears to affect adversely the
standing, character or reputation of a person appearing before the
Inquiry Authority, such material has been put before him to enable
him to remove any erroneous impressions concerning him. In this
connection, it will be pertinent to note that throughout the present
inquiry, the Inquiry Authority has also insisted on the confidentiality
of the proceedings. Further, to ensure that there is responsibility for
the statements made by persons appearing before the Inquiry
Authority, in all cases the statements, when in written form have
been required to be on affidavit, and when rendered orally have had
to be made on oath.
4.4 Summarising the total impact of the aforesaid considerations,

the Inquiry Authority is of opinion that its findings or observations
contained in this Report cannot be made the basis of a proceeding,
civil or criminal, against a person involved in the inquiry. Nor can
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any person involved in this inquiry claim any rights on the basis of
any finding or observation made in the Report.
5. Legal Assistance:
5.1 A panel of legal consultants was constituted by the Inquiry
Authority to assist it in the conduct of the Inquiry. The following
panel was constituted:
Senior Consultants
Mr. Dipankar P. Gupta, Senior Advocate, Formerly Solicitor
General of India;
Mr. T.R. Andhyarujina, Senior Advocate, Formerly Solicitor
General of India;
Mr. Raju Ramachandran, Senior Advocate, Formerly Additional
Solicitor General of India;
Mr. Parag Tripathi, Senior Advocate.
Junior Consultants:
Mr. Pragyan Sharma, Advocate, Supreme Court of India;

Mr. Siddhartha Dave, Advocate, Supreme Court of India;
Mr. Jayant Mehta, Advocate, Supreme Court of India;
Ms. Priyanka Sharma, Advocate, Supreme Court of India.
Of these legal consultants, Mr. Raju Ramachandran was appointed

as Senior Legal Counsel to the Inquiry Authority and Mr. Siddhartha
Dave as Legal Counsel to the Inquiry Authority.
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6. Term of the Inquiry Authority and the reasons for its
extension:
6.1 When my consent was sought by the Government to accept

appointment as Inquiry Authority, I mentioned that I was committed
already for the whole month of February 2006 to function as
President of the Olympic Division of the Court of Arbitration for
Sport for the Winter Olympic Games at Turin, Italy. In these
circumstances, the Government which at first had proposed a period
of 3 months, then considered that a period of 6 months should be
allowed to me as the Inquiry Authority for conducting and
completing the inquiry. However it was not possible to adhere to
this date for the reason that the entire volume of documentary
material pertaining to the Inquiry could not be made available to the
Inquiry Authority for a considerable period.
On December 8, 2005 the Inquiry Authority wrote to the Director of

Enforcement pursuant to Sections 4 and 5 of the Commissions of
Inquiry Act, 1952 as applied to the Inquiry Authority to produce
within a week and deliver all documents, statements, affidavits and
other materials, which had a bearing on, or were related or
connected to, the subject matter of inquiry which were in his
possession or control. In the reply dated December 23, 2006 the
Director of Enforcement stated that the Directorate of Enforcement
was investigating the matter connected with certain transactions
referred to in the Independent Inquiry Committee Report in
accordance with the provisions of FEMA, 1999, and that as the
8
investigations were at a very sensitive and critical stage, it would be
possible to hand over copies of the relevant documents only after the
investigation was completed. In regard to the records obtained from
the Independent Inquiry Committee, the Directorate of Enforcement
stated that before copies of these documents could be handed over to
the Inquiry Authority, a waiver in its favour had to be secured from
the Independent Inquiry Committee.
6.3 To secure the permission of the Independent Inquiry Committee

and make the documents already in the possession of the Directorate
of Enforcement available to the Inquiry Authority, proceedings were
taken at the United Nations level in that behalf, and ultimately by
letter dated December 28, 2005 the Directorate of Enforcement was
informed that there was no objection to the Directorate sharing the
Independent Inquiry Committee documents with the Inquiry
Authority.
6.4 On January 3, 2006 the Directorate of Enforcement wrote to

the Inquiry Authority enclosing a copy of the Annexure listing out
the documents which it had received from the Independent Inquiry
Committee and handed over copies of the documents to the Inquiry
Authority.
6.5 Then, in January, 2006, another collection of documents were

sent by the Independent Inquiry Committee to the Directorate of
Enforcement.
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6.6 On January 28, 2006 the Inquiry Authority requested the
Directorate of Enforcement that all documents, records and other
evidence available with the Directorate of Enforcement relating to
Contracts M/9/54 and M/10/57 be made available to the Inquiry
Authority. There was no response from the Directorate of
Enforcement for over two months and on April 3, 2006 the Inquiry
Authority again wrote to the Directorate of Enforcement for the
records, documents and other evidence. The Inquiry Authority
reminded the Directorate that sufficient time had passed and the
Directorate would presumably be in a position to supply the relevant
material emerging out of its investigation to the Inquiry Authority.
This had become imperative because the Inquiry Authority had
decided to commence recording evidence from April 17, 2006
onwards. It also said that a copy of the Inventory prepared by the
UN Legal Affairs Department was required. A copy of the
Inventory was forwarded by the Directorate of Enforcement to the
Inquiry Authority. At the same time, the Directorate of Enforcement
reiterated that in the case of certain transactions where investigation
was said to be still at an extremely critical and sensitive stage, the
documents would be furnished subsequently.
6.7 On May 3, 2006 the Inquiry Authority again requested the

Directorate of Enforcement to make available all the remaining
original documents received by the Directorate from various sources
abroad. On May 17, 2006 a further number of documents was
supplied to the Inquiry Authority.
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6.8 From the above, it is apparent that a significant volume of
documentary material was received from the Directorate of
Enforcement only by the end of the period of 6 months which had
been provided to the Inquiry Authority for conducting and
completing its inquiry. The Government was aware of the
difficulties that faced by the Inquiry Authority in proceeding
effectively with the Inquiry, and of its own it enlarged the period of
6 months by a further period of 3 months ending August 10, 2006.
7. Recording of Evidence:
7.1 At this point, it may be mentioned that a general notice was

published in the newspapers in January 2006 requesting persons to
file statements before the Inquiry Authority in regard to facts known
to them relating to the subject matter of the Inquiry. Some
statements were filed by the end of February 2006, but they were
wholly irrelevant.
7.2 Therefore, individual notices were issued to a number of

persons, and most of them filed their statements. They were called
and then oral statements were recorded in the following order:
Shri Andaleeb Sehgal : May 23, 2006
Shri A.R. Antulay : May 23, 2006
Shri Aditya Khanna : May 24, 2006
Shri Jamil Saidi : May 29, 2006
Shri Vipin Khanna : May 29, 2006
Shri Aneil Mathrani : May 29, 2006
Shri Jagat Singh : May 30, 2006
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Shri Asad Khan : May 30, 2006
Shri K. Natwar Singh : May 31, 2006
Shri Vikas Dhar : May 31, 2006
Shri Moti Lal Vohra : June 1, 2006
Shri P. Shiv Shankar : June 2, 2006
Shri Randip Singh Surjewala : June 2, 2006
8. Meeting of Inquiry Authority deputation with the Chairman,

I.I.C. and Staff:
8.1 After recording the oral statements, it was considered

necessary that clarification on certain points be sought from the
I.I.C. and its staff who were engaged in the preparation of the I.I.C.
Report. Accordingly, Shri Siddartha Dave, counsel to the Inquiry
Authority accompanied by Mrs. S. Pillai, Secretary to the Inquiry
Authority, were deputed to visit New York for that purpose. They
met Mr. Paul Volcker, Chairman of the I.I.C., Ms. Susan Ringler,
Committee Counsel and Mr. Aleksandr N. Shapovalov, Deputy
Counsel to the Committee of the Legal Affairs Department and
sought information on a number of points. Shri Siddartha Dave
interacted with the group and as a result of his queries, valuable data
was provided by the group. A copy of the Report submitted by Shri
Siddartha Dave is annexed hereto as Annexure – C.
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8.2 Thereupon, the Inquiry Authority considered it appropriate to
recall the following persons for further statements:
Shri Andaleeb Sehgal on July 17, 2006

Shri Jagat Singh on July 18, 2006
Shri Aditya Khanna on July 19, 2006
Shri Vikas Dhar on July 19, 2006
8.3 Beyond this, the Inquiry Authority requested and examined the
following persons also:
Shri H.C.S. Dhody
Shri R. Dayakar
Shri Krishna Kumar
Shri K.B.S. Katoch
as their evidence was considered necessary for the purpose of the
Inquiry.
9.0 This part of the Report proposes to examine the events that led
to the execution of the Contracts M/09/54 and M/10/57, which are
the subject matter of this inquiry, and the subsequent transactions
and dealings that took place between various persons and companies
involved either directly or indirectly in the execution of the two
Contracts. It will be necessary to trace the events of the period prior
to 2001, the year in which the said Contracts came to be executed, in
order to properly appreciate the method and manner in which the
said two Contracts were made in favour of M/s. Hamdaan Exports.
13
9.1 It will also be necessary to mention here the execution of
another Contract viz. M/09/120 which though executed was not
carried through and the oil barrels under the said Contract were not
lifted. Although it does not strictly fall within the Terms of
Reference of the Inquiry Authority, the reason for mentioning this
Contract and tracing the events leading up to it is that it needs
consideration because it was executed during the time context
relative also to the execution of the Contracts M/09/54 and M/10/57.
It may be observed that Contract No. M/09/120 came to be executed
in the month of May, 2001 and it followed the same pattern as the
two Contracts M/09/54 and M/10/57, thereby establishing and
confirming the modus employed by the concerned players in
obtaining and executing the two Contracts under inquiry.
EVENTS PRIOR TO JANUARY, 2001

9.3 As stated above, it is necessary to trace the events leading up
to the awarding and execution of Contracts M/09/54 and M/10/57.
9.4 In the year 1996-97, Shri Andaleeb Sehgal, a Delhi based

businessman and son of Shri Suman Sehgal, and Shri Aditya Khanna
son of Shri Vipin Khanna, a Non-Resident Indian (NRI), decided to
form a company by the name of INDRUS, as a 50:50 Joint Venture
Company. It was registered in Jersey, the Channel Islands, United
Kingdom to do business in commodities in Russia. The name
INDRUS is derived from India-Russia. In his deposition before the
Inquiry Authority, Shri Aditya Khanna stated that the company was
managed by an administrator, the CI Law Trust, an accounting firm
which also included some lawyers on its Board, while the shares
14
were beneficially held in the name of Shri Andaleeb Sehgal and Shri
Aditya Khanna. Although Shri Aditya Khanna stated before the
Inquiry Authority that he would provide the Certificate of
Incorporation, the share holding pattern and the accounts of the
company, he did not do so and subsequently explained that he was
unable to obtain the requisite documents. It may be mentioned at
this point that the CI Law Trust also managed M/s. Hamdaan
Exports Limited, a company involved in the execution of Contracts
M/09/54 and M/10/57. M/s. Hamdaan Exports Limited was
registered in the British Virgin Islands on February 9, 2001, and the
beneficial ownership therein belonged to Shri Andaleeb Sehgal. It is
of interest to note that there was also a Partnership Firm of
substantially the same name, M/s. Hamdaan Exports, with its
address at A-53, Panchsheel Enclave, New Delhi. Its partners were
Shri Andaleeb Sehgal and Shri Vikas Dhar.
9.5 Reference is made to INDRUS here because, as would be seen

in a later Chapter, part of the payments were received by Shri
Andaleeb Sehgal in his bank account in India towards his
commission for the execution of the said two contracts passed from
INDRUS.
9.6 Shri Aditya Khanna deposed that INDRUS managed to do

only one transaction since its incorporation as the trips made by him
and Shri Andleeb Sehgal in its behalf to Russia were largely
unsuccessful Both of them were disillusioned by the venture and
soon lost interest in it. He stated further that about a year or two ago
both of them asked that INDRUS be closed down. There is however
15
no documentary material before us to show that anything to that end
has been done so far.
9.7 It may be mentioned here that Shri Andaleeb Sehgal has stated
in his affidavit filed before the Inquiry Authority that INDRUS was
the name of Aditya Khanna’s company in London and that he had
nothing to do with it. Although there is no documentary material
before the Inquiry Authority indicating clearly who were the
beneficial owners of INDRUS, it is relevant to mention that Shri
Andaleeb Sehgal admitted during his examination that he had in fact
done business in Russia on behalf of INDRUS and had even carried
visiting cards of the company as a representative of it and that some
of the correspondence had been addressed to the office of Shri
Andaleeb Sehgal in Delhi. Although Shri Sehgal further stated that
he had never signed any document authorizing any person to “open
INDRUS” on his behalf, he did admit that he held himself out to be
a representative of INDRUS and had in fact tried to do business on
its behalf in Russia. Balancing the evidence on the record, the
Inquiry Authority is satisfied that INDRUS was a company
incorporated for the beneficial ownership of Shri Aditya Khanna and
Shri Andaleeb Sehgal.
9.8 It was while grappling with the failure of the doing business
venture in Russia that, as stated by Shri Aditya Khanna, Shri
Andaleeb Sehgal came to meet a person by the name of Shri Jamil
Saidi, who, as appears from various depositions given before the
Inquiry Authority, was involved in doing business in Iraq. It may be
noted that Shri Jamil Saidi also at one time General Secretary of the
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Youth Wing of the Congress Party in Rajasthan. Though Shri Jamil
Saidi stated before the Inquiry Authority that the nature of his work
was not that of a businessman but more that of an independent
Consultant, but the Inquiry Authority is inclined to believe that the
nature of his work was essentially that of helping Indian companies
to secure opportunities to do business in Iraq.
9.9 From the evidence it seems that Shri Jamil Saidi was well
known to Shri Andaleeb Sehgal. His application dated August 28,
2000 made on an Application Form for Miscellaneous Services on
Indian Passports mentions that he was a businessman and the
address of his place of business as A-53, Panchsheel Enclave, New
Delhi. This address, it will be recalled, is the address of Hamdaan
Exports.
9.10 Shri Andaleeb Sehgal was introduced to Shri Jamil Saidi by

one Shri Asad Khan, who appears to be a common friend, some time
during the years 1999-2000 to explore the possibilities of doing
business in Iraq. They discussed the possibilities of doing business
in wheat, rice, tea, sugar and other commodities through Hamdaan
Exports. Though Shri Saidi stated before the Inquiry Authority that
he advised Shri Sehgal and Shri Asad Khan as a friend and merely
wanted to help them, it appears to the Inquiry Authority that there
may have been some agreement for payment of a commission to
Shri Saidi by Hamdaan Exports for the business that may come its
way.
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9.11 That sometime in the months of October/November 2000,
Shri Jamil Saidi also met Shri Aditya Khanna, who was introduced
to him by Shri Andaleeb Sehgal. The meeting took place in New
Delhi and it was primarily to discuss the possibilities of doing
business in oil in Iraq. Both Shri Sehgal and Shri Khanna were
enthusiastic about doing business in oil in Iraq since it was a new
area and their desire to succeed in that field was strengthened by
their disappointment in the business relating to other commodities.
9.12 Shri Saidi claimed that he had extremely close ties with the
then Iraqi Ambassador to India, whose help he could seek to enable
Hamdaan Exports to participate in the tenders in Iraq. It was in that
context that about the same time he had a meeting with the Iraqi
Ambassador where Shri Sehgal was also present. Though the main
purpose of the said meeting, as stated earlier, was to obtain a letter
of recommendation for Hamdaan Exports, Shri Saidi stated before
the Inquiry Authority that the name of Shri Jagat Singh also came to
be mentioned. Upon being specifically asked as to how the name of
Shri Jagat Singh came to be mentioned at the meeting, Shri Saidi
stated that it was to further their business interests in Iraq by using
the name of Shri Jagat Singh’s father, Shri K. Natwar Singh, who
was a close friend of the then Deputy Prime Minister of Iraq, Shri
Tariq Aziz. This meeting took place sometime before November-
December 2000.
9.13 After the meeting of October/November 2000 at New Delhi,

Shri Aditya Khanna got a call from Shri Sehgal asking him to look
for companies which would be interested in doing business in oil in
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Iraq. This was suggested by a man named, George Curmi, an
independent trade consultant who works with various companies and
resides in London (United Kingdom). According to Shri Aditya
Khanna, Shri Andaleeb Sehgal had on his various visits to Baghdad
obtained information pertaining to doing business in oil in Iraq. One
requirement was to secure the services of a company experienced in
doing business in oil. For this purpose, Shri Sehgal sought the help
of Shri Khanna who in turn contacted George Curmi. Curmi
introduced Shri Khanna to a company by the name of Masefield
located in the United Kingdom. This was sometime in December,
2000 or even some weeks prior to that. According to Shri Khanna’s
testimony it took him about a month’s time or more prior to the
execution of the actual Contract on February 11, 2001, to get
Masefield AG to agree to do business with them for the oil that
could be obtained in Iraq.
9.14 George Curmi introduced Shri Aditya Khanna to a

representative of Masefield by the name of Nick Swan in London.
The three met initially to get to know each other and for Masefield
AG to agree to do business with Shri Khanna. Shri Sehgal was later
introduced by Shri Khanna to both Nick Swan and George Curmi.
9.15 It is clear from what has been stated above that the
opportunity to do business in oil in Iraq had already arisen in the
months of November/December 2000. Initial arrangements with a
foreign company i.e. Masefield AG had now also been made in
London. Though Shri Sehgal in his deposition stated that he only
went about doing what Shri Khanna asked him to do, Shri Khanna
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stated before the Inquiry Authority that his role was a limited one,
namely, to introduce Shri Sehgal to Masefield AG. The truth
appears to be that Shri Sehgal was entrusted with the job of getting
the allocation of oil under the United Nations Oil-For-Food
Programme in Iraq and to prepare the ground work in Iraq in that
behalf, and Shri Khanna was entrusted with the responsibility of
finding a company suitably qualified for actually lifting the oil.
Thus, by the end of December, 2000 and the beginning of January,
2001 the possibility of getting an allocation of oil in Iraq had started
to strengthen, and the necessary ground work for that purpose had
been performed by Shri Khanna and Shri Sehgal. What was now
left was obtaining the actual allocation of oil and the subsequent
lifting of it by a company appropriately qualified to do so.
THE EVENTS UNTIL JANUARY 18, 2001
10.0 It is clear from the above sequence of events that the thought
of doing business in oil in Iraq had already taken concrete shape in
the minds of Shri Aditya Khanna and Shri Andaleeb Sehgal. The
primary reason for thinking about engaging in the oil business in
Iraq was that the other businesses which Shri Andaleeb Sehgal had
attempted to do in Iraq, namely trade in commodities such as wheat,
rice and sugar had not fructified and the business forays in Russia
had not shown sufficiently encouraging success.
10.1 Shri Jamil Saidi had informed Shri Sehgal and Shri Khanna
about the difficulties in doing business in oil in Iraq. Before the
Inquiry Authority he stated that the business in oil in Iraq was
20
controlled by the political leadership of the country and only those
persons could manage to do business in oil in Iraq who had some
influential standing with the political leadership of the country. He
stated further that to succeed in doing business in oil in Iraq it was
futile to operate through a local agent; one had to deal directly with
the officials of the Oil Ministry. According to Shri Jamil Saidi,
there was a Committee of five people who were authorized by
President Saddam Hussain at that point of time to allocate oil. They
were the Deputy Prime Minister, the Oil Minister and some other
Ministers by whom or under whose instructions the allocations of oil
were made by the State Oil Marketing Organization (SOMO).
10.2 Therefore, when in the month of January, 2001 Shri

Andaleeb Sehgal with the help of Shri Aditya Khanna and Shri Jamil
Saidi decided to venture into procuring contracts for oil in Iraq, they
faced the difficulty that the contracts of oil from SOMO could be
obtained only if they could invoke the help of someone who enjoyed
some influence with the political leadership of Iraq. At this stage, it
appears that Shri Jagat Singh offered to help in securing the
contracts for oil by using the name or help of his father, Shri Natwar
Singh. It is not clear from the material on the record as to how
exactly did Shri Jagat Singh enter into the picture. It has been stated
before the Inquiry Authority that Shri Jagat Singh and Shri Andaleeb
Sehgal were very close friends. It is probable that Shri Sehgal
sought the help of Shri Jagat Singh and requested him to use the
political influence that his father, Shri Natwar Singh commanded
with the Government in Iraq. The opportunity came when they
learnt that a Congress delegation led by Shri Natwar Singh of the
21
Indian National Congress was leaving for Iraq around the January
18, 2001.
10.3 The delegation of the Indian National Congress Party was to

visit Iraq for the purpose of expressing solidarity with the people of
Iraq. According to Shri Moti Lal Vohra, an invitation had been
received from the Government of Iraq inviting a delegation from the
Indian Congress Party. A note was prepared by the then Secretary
of the External Affairs Department of the Indian National Congress
Party, Shri Aniel Mathrani, about the visit of the delegation to Iraq
and it was approved by the President of the Congress Party. The
delegation first consisted of three persons, Shri Natwar Singh, Shri
A.R. Antulay and Shri Aniel Mathrani and the original date of travel
was January 8, 2001 with the return date as January 12, 2001. For
this purpose, Shri Mathrani requested Shri K.V. Rajan, Secretary
(East), Ministry of External Affairs, New Delhi on January 3, 2001
to assist in the coordination of the visit.
10.4 The original composition of the delegation and even the

departure date was subsequently changed, Mr. P. Shiv Shankar was
added as a member of the delegation and the date of departure was
changed to January 18, 2001 and of return to January 24, 2001.
What was responsible for the change in the composition and the date
of departure is not clear and none of the persons who appeared
before the Inquiry Authority, who were part of the delegation could
throw light on this. It may be mentioned here that when Shri
Natwar Singh was asked about this, his answer was that the question
should be directed to Shri Aneil Mathrani, who was the Secretary in
22
the Foreign Affairs Department of the Congress Party, which
Department he had headed. When the Inquiry Authority asked Shri
Mathrani about this, his reply was that he did not know and that one
should ask Shri Natwar Singh. In fact Shri Mathrani stated that he
did not know Shri Natwar Singh closely. He said this even though
he was Secretary in the very same Foreign Affairs Department. It
appears, however, from the documents before the Inquiry Authority
that it was Shri Mathrani himself who coordinated the entire visit of
the delegation to Iraq. Shri Mathrani, during his deposition before
the Inquiry Authority, did not seem to recall many of the incidents
relating to the visit of the Congress delegation to Iraq and attempted
to distance himself entirely from any effort to closely associate him
with the delegation. This was done despite being shown documents
on which he hd signed. Although he admitted the signatures to be
his, he stated that he did not recall the contents of those documents.
10.5 The visit of the Congress delegation to Iraq was coordinated

by Shri Krishan Kumar, Counsellor, Embassy of India, Amman,
Jordon. The reason for involving the Indian Embassy in Jordon was
that at that particular time the sanctions regime was in place in Iraq
and direct access by air to Iraq was not permissible, and therefore,
anyone wanting to visit Iraq would have had to coordinate with the
Iraqi officials in Amman. It is in this context that the Counsellor at
the Embassy of India, Amman, was asked by Shri Mathrani to make
necessary arrangements for travel from Amman to Baghdad and
back and also to arrange for local transport for the delegation. It was
the Counsellor at the Indian Embassy, Amman who intimated that
the delegation had changed from three persons originally to four and
23
the date of departure had been postponed to January 18. This
information was given around January 9, 2001. The Counsellor
made the necessary travel arrangements for air-travel from Amman
to Baghdad. The Counsellor was examined by the Inquiry Authority
and he testified to the authenticity of the documents before the
Inquiry Authority relating to this aspect of the matter.
10.6 However, the Counsellor wrote on January 17, 2001 to the

Indian Embassy, Baghdad with reference to the visit of the Congress
Party delegation to Iraq and mentioned therein that the delegation
comprised six members. Apart from the four members whose names
were already available, the name of Shri Jagat Singh, son of Shri
Natwar Singh was added to the list of those who would travel to
Baghdad. The name of the sixth member was still not available.
The delegation was booked for its travel from Amman to Baghdad
on Royal Jordanian Flight No. 2718 leaving Amman on Friday,
January 19 at 1615 hrs, arriving Baghdad at 1845 hrs. On the same
day, the Counsellor wrote to the First Secretary, Embassy of the
Republic of Iraq, Amman informing him that the delegation would
consist of six members. The name of the fifth member was Shri
Jagat Singh, while the name of the sixth member was awaited from
New Delhi. He also requested that overnight hotel accommodation
of six single rooms may be booked at the Jordan Intercontinental
Hotel for the night of January 18, 2001 and that two cars be made
available for transfer to and from the Airport.
10.7 The Counsellor also wrote to one Ms. Rajaa, Iraqi Airways,
Amman giving the names of the Congress delegation as stated above
24
and stated that the name of the sixth member of the delegation was
not available and requested that the flight tickets be booked on the
flight mentioned above.
10.8 It is important to note that Shri Jamil Saidi in his deposition

before the Inquiry Authority stated that sometime in early January,
2001, probably a week before the Congress delegation was to depart
for Iraq, Shri Andaleeb Sehgal, Shri Jagat Singh and Shri Asad Khan
requested him for such assistance as he was able to provide them.
They requested that the names of Shri Andaleeb Sehgal and Shri
Jagat Singh be included in the names of the list of the Congress
delegation due to visit Iraq. The Iraqi Ambassador to India told him
that four names had already been received by him and it seemed
difficult to do anything but he gave the assurance that he would look
into the matter. The Ambassador refused to entertain the request
made to include Shri Sehgal’s name on the ground that he was a
private person. Shri Saidi stated that by the time the Ambassador
was to get back to him about including Shri Jagat Singh’s name, the
Ambassador had already been informed by Shri Jagat Singh that he
would be going there as a member of the Youth Congress.
10.9 The issue whether Shri Jagat Singh went to Iraq as a member
of the Youth Congress needs to be dealt with at this stage. Shri
Jagat Singh stated before the Inquiry Authority that at the relevant
time he was one of the General Secretaries of the Indian Youth
Congress. The President of the organization was Shri Randeep
Singh Surjewala. During his deposition before the Inquiry
Authority, Shri Jagat Singh was asked whether he went to Iraq as a
25
member of the Youth Congress on authorization by the Youth
Congress. His answer was in the affirmative. He stated that he had
been authorized by the then President of the Youth Congress Shri
Randeep Singh Surjewala.
10.10 However, the Inquiry Authority called Shri Randeep Singh

Surjewala for examination and asked him whether he had at any
point in time, in particular in January of 2001, authorized Shri Jagat
Singh to go to Iraq as a representative of the Youth Congress. The
answer of Shri Surjewala was in the negative. He stated that at no
point in time had he authorized Shri Jagat Singh to go to Iraq and
that the structure of the Youth Congress does not empower it to take
any decision for meetings outside India, which necessarily have to
be approved by the Parent body i.e., the Indian National Congress.
10.11 Shri Jagat Singh subsequently filed before the Inquiry

Authority a letter purporting to have been signed by Shri Surjewala
claiming it to be the letter authorizing him to visit Iraq. The letter is
dated January 4, 2001. It is not addressed to any particular person.
It is inscribed “To Whom So Ever It May Concern”. It is apparent
however that the letter is to be used in Iraq. As pointed out by Shri
Jagat Singh, the last line in the letter reads:
“……………We also look forward to the day that sanctions against

your great nation are lifted…..”
26
The one country which could have been intended was Iraq. There is
nothing to show that any other country was under a “sanctions”
regime.
10.12 The delegation of the Congress Party traveled from New

Delhi to Amman on January 18, 2001. Traveling along with the
delegation were two other persons, Shri Jagat Singh and Shri
Andaleeb Sehgal. Though Shri Sehgal has stated that he happened
to be in Amman when the delegation arrived, Shri P. Shiv Shanker
has stated that he saw both of them at the airport at New Delhi and
they flew with the delegation in the same flight from New Delhi.
Therefore, the Inquiry Authority is not inclined to believe the
explanation put forward by Shri Sehgal that he had happened to be
in the same hotel at Amman where the delegation was put up. The
assertion of Shri Sehgal is also belied by the fact that on January 17,
2001, the Counsellor at the Indian Embassy in Amman informed his
counter part in the Iraqi Embassy, Amman, that the delegation
consisted of six persons and that six single rooms should be arranged
for their stay. It is further belied by the deposition of Shri P. Shiv
Shanker who stated that Shri Sehgal and Shri Jagat Singh traveled
with them from New Delhi. It is no coincidence also that the
number of days that Shri Sehgal stayed in Amman and Baghdad
were exactly the number of days that the delegation spent in visiting
the two countries. Therefore, the Inquiry Authority finds that Shri
Jagat Singh and Shri Sehgal accompanied the delegation from New
Delhi.
27
Amman-Baghdad: January 18 to 24, 2001
11.0 The above narration clearly shows that six persons, four of
whom were part of the official Congress Delegation, arrived in
Amman on January 18, 2001. The fifth, Shri Sehgal has admitted
that he was in Amman on January 18, 2001.
11.1 The Ambassador of India to Amman at that point of time was

one Shri H.C.S. Dhody. He has been examined. From the
documents available before the Inquiry Authority it appears that a
dinner was arranged at the residence of the Ambassador of India to
Amman where nine persons were mentioned in the list of those
expected to be present. Out of the nine persons four of them were
the official Congress delegates and two were Shri Jagat Singh and
Shri Andaleeb Sehgal. Shri Dhody deposed before the Inquiry
Authority that the names of Shri Jagat Singh and Shri Sehgl were
included in the list of invitees because they were there along with
the members of the Delegation. It may be mentioned here that
when Shri Andaleeb Sehgal was asked about his presence at the
dinner he denied being present there. Shri Dhody, however, stated
that all the persons whose names mentioned in the list of invitees
were present at the dinner. However, it makes little difference to the
main issue in this case as to whether Shri Sehgal dined with the
Indian Ambassador at Amman.
11.2 The official Congress Delegation took a flight to Baghdad on

January 19, 2001 and they were accompanied by Shri Jagat Singh.
28
Shri Andaleeb Sehgal did not board the flight but instead went by
car to Baghdad. Be that as it may, the members on the flight and
Shri Sehgal arrived in Baghdad on January 19, 2001. The official
Congress Delegation had meetings with some Ministers of the Iraqi
Government and attended some functions arranged for them in
Baghdad. It is not clear as to what Shri Jagat Singh and Shri Sehgal
were doing in the initial few days of their time in Baghdad. Shri
Mathrani who was in charge of the visit of the Delegation to
Baghdad did not disclose to the Inquiry Authority, when he appeared
before it, as to what exactly transpired during the visit of the
Delegation to Baghdad. None of the delegates were forthcoming in
their depositions about what transpired and whom they met while in
Iraq. It is surprising that though the delegation was “a high profile
Delegation”, no itinerary had been prepared for the vist of the
Delegation in Iraq. Shri Mathrani, whom one would have expected
to be in charge of this aspect, stated that it was Shri Natwar Singh
who was in charge of the Delegation and it was in fact, Shri Natwar
Singh who knew about the various meetings that were to take place.
The Inquiry Authority asked the several members of the official
Delegation whether any Report of the visit had been submitted upon
their return from Baghdad to the President of the Congress Party.
The replies were either that they did not know or that it could have
been prepared, but they themselves did not prepare any Report. It is
in the absence of any such documentary proof before the Inquiry
Authority and also the fact that no Report, if prepared, was
submitted to the President of the Congress Party that has made the
task of the Inquiry Authority somewhat difficult in ascertaining the
exact nature of the business transacted in Baghdad. The Inquiry
29
Authority is left with no option but to fall back upon the oral
testimony of the six persons who were in Baghdad at the relevant
time and to cull out the truth from their statements.
11.3 Of these six persons who were examined by the Inquiry

Authority, the deposition of Shri P. Shiv Shanker appears to be the
most comprehensive and detailed. Shri Shiv Shanker stated that
while they were in Iraq they met some Ministers including the
Petroleum Minister. But he also stated that it was possible for
individual members of the Congress delegation to meet some of the
Ministers separately.
11.4 The fact that Shri Natwar Singh met the Oil Minister,
Government of Iraq, Dr. Amer Mohammed Rasheed, on January 22,
2001 along with Shri Andaleeb Sehgal is borne out by a letter
written by Shri Natwar Singh himself on January 30, 2001. The said
letter is one of the most crucial pieces of evidence in this
proceeding. It demonstrates that Shri Natwar Singh utilized his
presence in Iraq not merely for the purpose of representing the
Congress Party in a goodwill mission but also took the opportunity
of lending his assistance in the procurement of the oil allocation to
Shri Andaleeb Sehgal who accompanied him on the visit to the Oil
Minister. It is appropriate at this stage to describe and quote the
contents of the letter. The said letter was written on an official
letter-head of the All India Congress Committee with the name of
Shri Natwar Singh shown on the letter head as “Member, Congress
Working Committee” and beneath that “Chairman, Foreign Affairs
Department”. The address given is 24, Akbar Road, New Delhi.
30
The official phone numbers of the All India Congress Committee are
mentioned on the letter head itself and at the bottom of the letter
head the residence phone numbers along with the fax number are
mentioned. The letter reads as follows:
January 30, 2001

Excellency,
I am sending this letter with Mr. Andaleeb Sehgal. He was present
when I called on you on January 22, 2001 at your office in Baghdad.
He is well known to me for many years and so is the company he
owns. He enjoys my full support and confidence, and I would
appreciate you giving him your full assistance and cooperation.
May I take this opportunity to thank you for receiving me and giving
me so much of your time out of your busy schedule.
I greatly valued our discussions on Indo-Iraq relations and wider

issues of importance to both our Parties and countries. The
Congress Party greatly values its fraternal links with the Arab Ba’ath
Socialist Party. I believe that these links have been further
intensified during our stay in Baghdad.
We have returned full of admiration for your stouthearted people.

With regards,
Yours sincerely,
(K. Natwar Singh)
H.E. Dr. Amer Mohammed Rasheed,

Minister of Oil
Govt. of Iraq
Baghdad
31
11.5 Before the Inquiry Authority, Shri Natwar Singh was asked
whether he had called on the Oil Minister during the visit to
Baghdad, to which he answered in the affirmative. He was further
asked whether he alone, without other members of the delegation
being present, met the Oil Minister and he responded: “Yes,
myself”. He stated that the other members of the delegation were
not present because they were busy elsewhere.
When confronted with the aforementioned letter he admitted that

the signatures on the said letter were his. He however stated that he
was not sure about the text of the letter.
The Inquiry Authority is of opinion that the aforementioned letter

was in fact written by Shri Natwar Singh because not only is the
signature on the letter that of Shri Natwar Singh but also the words
“with regards” are written by hand, the handwriting of which Shri
Natwar Singh admitted to be his.
Accordingly, the Inquiry Authority is satisfied both as to the

contents and the form of letter that it was Shri Natwar Singh who
wrote it.
11.6 It is possible that Shri Jagat Singh was also present at the
very said meeting since in a subsequent letter dated April 26, 2001
again addressed to the Minister of Oil, Iraq, written by Shri Natwar
Singh it is stated that Shri Jagat Singh was with Shri Natwar Singh
and Shri Andaleeb Sehgal when they called upon the Iraqi Oil
Minister about three months ago. The aforesaid letter is written on a
32
similar letter head of the All India Congress Committee and is
marked as “personal”. This letter is dealt with subsequently herein
by the Inquiry Authority.
11.7 It is thus evident that a meeting took place with the Iraqi Oil
Minister where Shri Natwar Singh, Shri Jagat Singh and Shri
Andaleeb Sehgal were present. No other members of the delegation
were present at that meeting. What transpired during the said
meeting is not known since none of the three persons mentioned
above have deposed before the Inquiry Authority about the same.
However, it is reasonable to infer that there was some talk about the
allocation of oil since on the very next date i.e. on January 23, 2001,
Shri Jagat Singh and Shri Sehgal, along with Shri Mathrani went to
the building of the State Oil Marketing Organization (SOMO) where
they were explained about how the Iraqi officials in the Ministry of
Oil went about allocating oil to companies under the Oil-for-Food
Programme. This appears from the deposition given by Shri R.
Dayakar who was at that time the Ambassador of India to Iraq. Shri
Dayakar deposed before the Inquiry Authority that there was a call,
while the delegation was visiting Iraq, from the Iraqi Foreign
Ministry asking him to be present at the office of SOMO. When he
went there, Shri Jagat Singh, Shri Aniel Mathrani and Shri Andaleeb
Sehgal were also present there. Shri Dayakar stated further that he
had arranged for an interpreter for the meeting and the conversation
at the meeting took place in Arabic and English. Also present at that
meeting was the Executive Director of SOMO, a person by the name
of Saddam Zibn Hassan. At the meeting the Indian members were
explained the process and procedures to be followed in relation to
33
the United Nations approved Oil-for-Food Programme. Shri
Dayakar went on to state that the officials of SOMO were probably
under the impression that the Congress delegation was an official
delegation since in Iraq at that point of time there was no distinction
between the Government and the political party. More importantly,
Shri Dayakar stated that the Executive Director of SOMO had
mentioned that they had instructions from top officials to receive the
Indian delegation. It was further stated that the SOMO officials
explained to the Indian Members that a company needs to be
registered with the United Nations before it can lift or do business
under the Oil-for-Food Programme.
11.8 It is apparent that the meeting of Shri Natwar Singh with the
Iraqi Oil Minister carried great significance. That can be judged
from the fact that the State Oil Marketing Organization (SOMO)
opened its doors to Shri Jagat Singh and Shri Andaleeb Sehgal the
very next day after the meeting between Shri Natwar Singh and the
Iraqi Oil Minister. It was known at that time that the Iraqi
Government did not deal with any stranger and did not permit any
one apart from the persons who had been approved by them to deal
in the commodity of oil. It is also well known that at that time the
Iraqi Government allocated oil only to those persons or entities that
were perceived as “Iraqi friendly”. Shri Natwar Singh was well
known in international circles and was an influential international
personality as he had been the External Minister of India for many
years. He was also at that time Chairman of the Foreign Affairs
Department of the All India Congress and was a member of the All
India Congress Committee. The Iraqi officials were probably of the
34
belief that Shri Natwar Singh would be able to help their cause in
the international community and his influence would be great
especially as he was a senior member of considerable standing in his
party, the Indian National Congress. There can be no doubt that the
terms in which he recommended the case of Shri Andaleeb Sehgal
would have carried more than significant weight. The letter written
by Shri Natwar Singh as mentioned above on January 30, 2001 and
also a letter written by Shri Andaleeb Sehgal a day after his return
from Baghdad on January 25, 2001 are of arresting interest.
11.9 During the stay of the Indian delegation at Baghdad, the

Indian Ambassador at Iraq hosted a reception for the Indian
delegation where apart from the four members of the official
Congress delegation, Shri Jagat Singh and Shri Andaleeb Sehgal
were also present. At this dinner Shri Jagat Singh introduced Shri
Sehgal to the Ambassador and sought his active assistance and
cooperation to further the business interests of Shri Sehgal in Iraq.
11.10 Upon its return from Baghdad, the Indian Ambassador at

Amman hosted another dinner for the delegation and this dinner,
apart from the members of the delegation, was attended also by Shri
Jagat Singh and Shri Andaleeb Sehgal. The following day all the
persons returned back to India.
35
EVENTS CULMINATING IN THE ALLOCATION OF
CONTRACT NO. M/09/54
12.0 The Congress delegation and Shri Jagat Singh and Shri
Andaleeb Sehgal returned from Amman to India on January 25,
2001. Immediately upon his arrival in India, Shri Sehgal sent a fax
to SOMO wherein he referred to the meeting which was held on
Tuesday, January 23, 2001 in the office of SOMO regarding
allocation of 2 million barrels of crude oil. In the said letter which
was written on the letter head of Hamdaan Exports, a partnership
firm in which Shri Sehgal was a partner, it was stated that Shri
Sehgal would be providing SOMO with the following documents:
1. An authorization letter from the Leader of the Indian delegation

to Shri Andaleeb Sehgal of Hamdaan Exports to lift or negotiate
the allocation with SOMO.
2. A letter of undertaking from Hamdaan Exports confirming that
the amount of 25 cents for Far East or European Ports or 30 cents
for US destination will be paid to SOMO 30 days from the issue
of the Bill of Lading. A bank guarantee to this effect will also be
provided within 10 days of signing the contract.
3. An authorization from Hamdaan Exports to the buyers for lifting
of this quantiy.
12.1 It is clear from the aforesaid that the condition that was
imposed by SOMO during the meeting of January 23, 2001 in
Baghdad was that Shri Sehgal get a letter from the leader of the
36
Indian delegation, namely Shri Natwar Singh. It would have been
only upon Shri Sehgal making available this letter from Shri Natwar
Singh that Hamdaan Exports would be able to negotiate the
allocation of 2 million barrels of crude oil. Thus, it is evident that
during the visit of the Congress delegation, Shri Natwar Singh’s
meeting with the Oil Minister, with Shri Andaleeb Sehgal
accompanying him, played a vital part in the allocation of 2 million
barrels of crude oil to Shri Sehgal. The allocation of two million
barrels of oil was made to Andaleeb Sehgal solely because the Iraqi
Government wanted to oblige Shri Natwar Singh.
12.2 During his deposition before the Inquiry Authority, Shri

Sehgal stated that the officials of SOMO had asked him to obtain
the approval from the Government of India and it is only when he
failed to obtainthat approval tht he obtained an endorsement from
Shri Natwar Singh. It is difficult to accept this. There is no
tangible evidence that Shri Sehgl made any attempt to secure the
approval of the Government of India in order to obtain the
allocation of oil. In fact, on the very day that he returned from his
visit to Amman and Baghdad, Shri Sehgal wrote to SOMO stating
that he would get a letter of authorization from the leader of the
Indian delegation, namely Shri Natwar Singh.
12.3 What is also clear from the letter of January 25, 2001 is that
Hamdaan Exports, upon allocation of the oil, would give a letter of
undertaking wherein it agreed to pay the amounts stated above to
SOMO. Though the letter does not use the words “surcharge”, it is
evident from a plain reading of the letter that it is nothing but an
37
undertaking to pay the surcharge. Thus, it appears that the
question of payment of surcharge had been explained to Shri
Sehgal and the others when they called upon the Oil Minister on
January 22, 2001and during the meeting with SOMO on January
23, 2001.
12.4 One other aspect is clear from the letter itself and that is that
Hamdaan Exports on January 25, 2001 was aware that it would be
authorizing a third party (buyer) for lifting the oil allocated and it
was already in touch with Masefield AG. It is difficult to believe
the claim by Shri Sehgal in his deposition before the Inquiry
Authority that till then he had no idea who the buyer would be.
12.5 Almost simultaneously, Nicholas (Nick) Swan representing

Masefield Ltd., a company located in London, England wrote to
SOMO on January 26, 2001 which letter was sent by telefax to
Baghdad wherein he requested for the issuance of a visa to him.
Interestingly the letter is titled “Invitation to visit SOMO –
Hamdaan Exports Allocation”. It goes on to state as follows:
“……….I refer to the recent visit to your offices and your

meeting with Andaleeb Sehgal in January concerning the
political allocation of two million barrels of Basrah Light Crude
Oil and understand that he intends to return to Baghdad in early
February to sign the contract and would like to accompany him
when he does……..”.
A copy of this letter was marked to Shri Andaleeb Sehgal, Delhi.

38
12.6 It is evident from a bare reading of this letter that Masefield
Ltd. was already in the picture when the delegation headed by
Shri Natwar Singh and accompanied by Shri Jagat Singh and
Shri Sehgal visited Iraq. It would not have been possible for Mr.
Sehgal to come across Masefield only within a day of his return
from Baghdad. The letter confirms that there was a meeting in
January, 2001 in the offices of SOMO in Baghdad and that the
allocation made was a “political allocation”.
12.7 Next in the sequences of events is the letter written by Shri

Natwar Singh on the letter head of the All India Congress
Committee dated Janaury 30, 2001. The significance of the letter
now becomes clearer. It was given as an approval of Shri
Andaleeb Sehgal, as was desired by the officials in the Oil
Ministry in Iraq and as mentioned by Shri Sehgal in his letter of
January 25, 2001. This letter of January 30, 2001 has already
been analyzed in the preceding chapters and is not being repeated
here. What is important, however, is to state that the letter of
January 30, 2001 stresses that Shri Sehgal is well known to Shri
Natwar Singh for many years and so is the company he owns,
and that Shri Sehgal enjoyed Shri Natwar Singh’s full support
and confidence. In language which is forthright, he said that he
would appreciate the Oil Minister giving Shri Sehgal his full
assistance and cooperation.
12.8 Another aspect which is important is that the letter does not
speak of whether it was for a personal or official use. But Shri
39
Moti Lal Vora, when examined by the Inquiry Authority in his
capacity as a Treasurer of the Indian National Congress,
characterized the letter as a letter for a personal purpose. When
Shri Natwar Singh goes on to state about the Congress Party and
how it greatly values the fraternal links with the Arab Ba’ath
Socialist Party and that these links have been further intensified
during their stay in Baghdad, it is apparent that Shri Natwar
Singh tried to project himself as speaking for the entire Congress
Party while in fact he was addressing a personal request to the
Iraqi Government.
12.9 Shri Sehgal during his deposition before the Inquiry

Authority admitted to having received the letter from Shri
Natwar Singh and further that he carried it with him to Iraq when
he visited Iraq around February 8, 2001 and handed over the
letter to the officials at SOMO.
12.10 On February 3, 2001, Shri Andaleeb Sehgal addressed a

letter to the officer-in-charge at the Permanent Mission of India
at the United Nations, New York wherein he stated that he had
been “granted” an allocation of crude oil under the United
Nations Oil-for-Food Programme and that he would be obliged if
the Mission would help, as a matter of urgency, in submitting his
application for accreditation to the United Nations Oil Overseers.
In this letter the name mentioned of the contract person was Mr.
Nick Swan. It will be recalled that Nick Swan was the
representative of Masefield Limited. Prior to this letter Shri
Sehgal had received a fax from one George Curmi, with a copy
40
marked to “AK2” informing Hamdaan as to whom the
application of Hamdaan was to be submitted. The letter of
George Curmi was sent from two fax numbers mentioned on it,
and Shri Sehgal during his deposition informed the Inquiry
Authority that one of these was the fax number of Shri Aditya
Khanna and that the reference to AK2 stood for Aditya Khanna.
12.11 Shri Sehgal stated that George Curmi was actually

working for Shri Aditya Khanna in London and was using his
office as well. This was denied by Shri Khanna but he admitted
that one of the fax numbers on the letter was his. It seems to the
Inquiry Authority that George Curmi was a person carrying on
the business of a consultant but more as a liaison acting between
two entities for a commission payable to him. Shri Khanna has
stated before the Inquiry Authority that George Curmi had been
introduced to Shri Sehgal by him and in fact it was this George
Curmi who had located Masefield Limited for doing business
with Hamdaan Exports. The Inquiry Authority is of the opinion
after perusal of the records that George Curmi was described as
an independent consultant and was paid by Masefield a sum of
USD 9,000/-. It may be of interest to note that both Shri Khanna
and Shri Sehgal claimed that George Curmi was closer to the
other. Be that as it may George Curmi did play the role of a
liaison man in this entire transaction between Hamdaan Exports
and Masefield Limited.
12.12 Coming back to the sequence of events, SOMO wrote to

the Iraqi Embassy in London asking them to issue a visa in
41
favour of Mr. Nick Swan so as to enable him to visit Baghdad.
SOMO also wrote to the Iraqi Embassy at New Delhi on
February 1, 2001 asking it likewise to issue a visa to Shri Sehgal.
On February 5, 2001 Shri Andaleeb Sehgal wrote to the then
Ambassador of India at Amman stating that he was intending to
travel to Baghdad from Amman. Since he was unclear as to how
to go about this procedure he sought the help of the Indian
Ambassador. Accordingly he was informed by the Indian
Embassy at Amman about the difficulties in traveling by air to
Baghdad and that the road was the best way to travel.
12.13 Shri Sehgal and Nick Swan arrived in Baghdad on

February 9, 2001. It is not clear whether they were accompanied
by any other person of significance.
12.14 While in Baghdad, a letter was given by Masefield AG

addressed to Shri Andaleeb Sehgal dated February 9, 2001 with
the caption “Payment For An Allocation Of Crude Oil Under
The UN Oil for Food Programme”. In this letter it was stated by
Nick Swan that Hamdaan Exports had been allocated 2 million
barrels of Basrah Light and confirmed that Masefield would
accept full legal assignment of the allocation from Hamdaan. It
went on to state that Masefield would attend SOMO’s offices
with Shri Sehgal and sign a contract on behalf of Hamdaan.
According to the letter, a total fee of USD 0.30 (30 cents) per
barrel would be paid to Hamdaan. Out of this, 3 cents per barrel
would be paid promptly upon signing of the contract. Masefield
would also open a bank guarantee to a nominee bank of
42
Hamdaan Exports for a further 22 cents per barrel in 30 days
before the anticipated bill of lading date. Masefield would pay a
further 5 cents per barrel to a bank of Hamdann’s choice.
12.15 The need for assignment of the contract by Hamdaan in

favour of Masefield AG, a company registered in Switzerland
and owned by Masefield Limited of England, arose because
under the UN Oil-for-Food Programme only companies
approved by the United Nations or accredited with it were
allowed to lift the Iraqi oil. Masefield AG was such a company.
Since Hamdaan Exports was not registered with the United
Nations nor was it approved by the United Nations, it would not
have been possible for Hamdaan Exports to actually lift the oil.
Every contract entered into between a company and SOMO for
the sale of oil had to be approved subsequently by the United
Nations and only such of the contracts were approved as were in
favour of UN approved companies. Thus, even though the
allotment initially was in favour of Hamdaan Exports it would
have to be assigned by it to Masefield, which then would enter
into the contract with SOMO.
12.16 The letter of Masefield AG of February 9, 2001 showed

that the prevalent rate of surcharge that was payable per barrel of
oil was 25 cents. Thus out of the 30 cents of fee paid by
Masefield to Hamdaan, 25 cents of that would go towards
payment of surcharge to SOMO and the share of Hamdaan
would be 5 cents per barrel of oil. Shri Aditya Khanna, during
the course of his deposition before the Inquiry Authority, stated
43
that his share out of the five cents per barrel of oil was one cent
while four cents were to be retained by Hamdaan Exports.
Although, as is stated in the later part of this Report dealing with
financial transactions, there is no written agreement that has
come before the Inquiry Authority to prove this fact, yet a
perusal of the accounts of Hamdaan and INDRUS, shows the
likelihood of such an agreement or arrangement having been
entered between the said parties.
12.17 It may be mentioned that probably on the advice of Mr.

George Curmi and Mr. Nick Swan, Shri Sehgal decided to create
another company by the name of Hamdaan Exports Limited, a
company to be incorporated in the British Virgin Islands.
Various documents have been located relating to the
incorporation of Hamdaan Exports Limited, including a
Certificate of Incorporation issued by the Registrar of Companies
in the Territory of the British Virgin Islands under the
International Business Companies Act. The number on the
certificate is 431599. The company was managed by the same
C.I. Law Trust Group Limited (Channel Islands Law Trust
Group Limited) which, as has been noted earlier, was also
associated with the company of Shri Khanna and Shri Sehgal
called INDRUS. The shares of Hamdaan Exports Limited were
held by this C.I. Law Trust Group Limited and the beneficial
owner was Shri Andaleeb Sehgal.
12.18 When confronted with the sets of documents relating to

Hamdaan Exports Limited, Shri Sehgal denied any knowledge of
44
them and stated that he was unaware of the registration of any
such company in his name. However, when Shri Khanna was
asked about these documents and the registration of Hamdaan
Exports Limited he stated that Shri Sehgal did have a company
which was registered as an offshore company and affirmed that
the Certificate of Incorporation was a true copy of a genuine
Certificate of Incorporation of a company in the British Virgin
Islands. Shri Khanna was able to depose this because, as he had
stated before the Inquiry Authority, he had already incorporated
an offshore company and was familiar with these procedures by
reason of his experience in international business and trade.
12.19 The set of documents relied on by the Inquiry Authority

relating to Hamdaan Exports Limited has been obtained through
the Ministry of Foreign Affairs, the Hashemite Kingdom of
Jordan, Amman which has in turn obtained them from the Jordan
National Bank. The documents were available with the Jordan
National Bank, Cyprus because Shri Andaleeb Sehgal opened
two bank accounts with the Jordan National Bank, Cyprus, one
being Account No. 12367 in the name of Hamdaan Exports
Limited and the other being Account No. 12349 in the name of
Shri Andaleeb Sehgal. The Jordan National Bank has sent to the
Inquiry Authority the applications for opening two current
accounts. Both were signed by Shri Andaleeb Sehgal. Shri
Sehgal was asked about these documents, and he answered that
he did not remember having opened any bank account in Cyprus
as he had never traveled to Cyprus. Strangely, however, he did
admit that the signatures on the said two documents i.e. the
45
account opening forms as his. In the circumstances, the Inquiry
Authority takes the view that Shri Sehgal did as a matter of fact
open the said two bank accounts.
12.20 That view is confirmed by the circumstance that Shri

Sehgal wrote various letters to the concerned officials of the
Jordan National Bank, Cyprus in which references have been
made to the said two accounts in relation to transactions of
money leading to a credit or a debit in one or the other of the two
accounts. These letters bear the signatures of Shri Sehgal. It
may be pointed out here that these two accounts were the
accounts which Shri Sehgal used and operated to receive the
payment of commission which Masefield paid to Hamdaan
Exports Limited as its share in the transactions relating to the two
contracts under inquiry.
12.21 While the said three persons were in Baghdad, they visited
the offices of SOMO to enter into and execute the Contract
M/09/54 for two million barrels of oil. The said Contract was
entered into on February 11, 2001 between SOMO and
Masefield, which was represented by Nick Swan. Prior to this,
Shri Andaleeb Sehgal representing Hamdaan Exports executed a
Deed of Assignment in favour of Masefield AG in respect of the
allocation by SOMO of 2 million of barrels of Iraqi crude oil.
The said Assignment was signed by Shri Andaleeb Sehgal and
Mr. Nick Swan. The Assignment referred to a letter dated
February 9, 2001 wherein the assignee agreed to pay the assignor
a fee for the assignment of the sale contract to the assignee.
46
12.22 However, the obligation to pay the surcharge to SOMO
for the said allotment of two million barrels of Iraqi oil remained
with Hamdaan Exports. This was not assigned to Masefield AG
under the Deed of Assignment. In fact Shri Andaleeb Sehgal
gave an undertaking addressed to Mr. Saddam Z. Hassan,
Executive Director General, SOMO on February 11, 2001,
wherein he agreed to issue a bank guarantee for the payment of
the surcharge for the quantity of two million barrels, which bank
guarantee would be submitted to SOMO 10 days prior to the date
of each lifting. The letter further stated that Hamdaan Exports
undertook to pay to an account nominated in that behalf by
SOMO, the surcharge in the amount of 0.25 USD per barrel of
oil net loaded for Europe and Far East destinations and 0.30 USD
per barrel of oil loaded for US destinations. This payment had to
be done within 30 days from the receipt of the Bill of Lading.
The letter further stated that payment of 10% of the total
surcharge was to be paid to the nominated account prior to
sending the contract for approval.
12.23 Thus it is clear from the above that although the oil under
the contract was assigned to Masefield AG, which ultimately
signed the Contract M/09/54, the obligation to pay the surcharge
remained with Hamdaan. This would be so because SOMO had
no direct relationship with Masefield AG. The allocation
according to their practice, had been made to Hamdaan Exports
and it was a political allocation. Therefore, since the allocation
as per SOMO’s record had been made to Hamdaan Exports the
47
obligation to pay the surcharge remained with Hamdaan Exports.
SOMO was not concerned with Masefield AG, which may or
may not lift the oil. According to Shri Sehgal, he had assigned
the entire bundle of rights and obligations under the contract to
Masefield AG. However, he was unable to point to any
provision in the Deed of Assignment obliging the assignee to pay
the surcharge. The document dated February 11, 2001
undertaking to pay the surcharge bore his signature – that was
admitted by him. It may be stated that there is material to show
that as a matter of fact Hamdaan Exports did pay a surcharge for
the amount of oil lifted under this Contract to SOMO from the
bank accounts maintained in the Jordan National Bank, Cyprus.
Therefore, the case adopted by Shri Sehgal that he was under no
obligation to pay the surcharge is not acceptable.
12.24 Once the Contract was entered into, it was the practice of
SOMO to send to the Oil Minister, Iraq a letter seeking the
latter’s approval for the contract entered into. In this case also a
letter was written by Saddam Z. Hassan to the Oil Minister, Iraq
wherein approval was sought for Contract No. M/09/54. The
letter at serial number 3 mentioned:-
“Name of Purchasing Company: Swiss (in English Masefield

AG) for Natwar Singh, Member of the Indian Congress Party”.
The said letter was written in Arabic, However the words

Masefield AG were written in English. The approval of the
Minister was obtained on February 15, 2001.
48
10.25 It was only after the Minister had approved it that the
contract was, thereafter, sent to the United Nations for their
approval, which in the present case was granted.
10.26 It seems from the letter written by the Executive Director

of SOMO that in the eyes of the Iraqi authorities the intended
beneficiary of the contract was Shri Natwar Singh of the Indian
Congress Party. Had Shri Natwar Singh not met the Iraqi Oil
Minister on January 22, 2001, when he visited Baghdad, there
would have been practically no possibility of Hamdaan Exports
obtaining the contract. These allocations were political
allocations for which the primary consideration was that the
person at whose behest the contract was being allocated was
friendly to the people of Iraq and sympathetic to their cause.
This letter was put to Shri Natwar Singh when he was examined
by the Inquiry Authority. He did not offer any explanation as to
how his name came to be mentioned in the letter of the Executive
Director, SOMO to the Oil Minister, Iraq. All these
considerations taken together indicate why Shri Natwar Singh
was described by the I.I.C as a Non-Contractual Beneficiary and
suggest the perspective in which he was so regarded by the Iraqi
authorities.
PAYMENTS AND LIFTING OF OIL UNDER CONTRACT

M/09/54
13.0 After the execution of Contract No. M/09/54 and its

assignment to Masefield AG, Shri Andaleeb Sehgal returned
49
from Baghdad to India. While in India he continued to take
active interest in obtaining the approval of the contract from the
United Nations and, accordingly, he kept in close touch with the
officials of SOMO besides Mr. Nick Swan and Mr. George
Curmi. In that connection, he wrote to SOMO on March 2, 2001
and announced that he had fulfilled condition No. 3 of the letter
of February 11, 2001 which required that 10% of the total
surcharge was to be paid into a nominated account of SOMO
prior to sending the Contract for approval.
13.1 In his letter of February 27, 2001, Shri Sehgal wrote to one
Mr. Joseph Bitar of the Jordan National Bank, Cyprus stating
that an amount of USD 62,000 would be credited in the Account
No. 12349 in the name of Shri Andaleeb Sehgal by Masefield
and that on receipt of the said amount a sum of USD 60,000 was
to be transferred to the Jordan National Bank, Amman to the
credit of Account No. 500320/02, and Mrs. Nawzat A. Al Qudsi
informed accordingly. The account number referred last was in
the names of Saddam Z. Hassan and Ibrahim Ali Shaiyeb of
SOMO. Information of this transfer was to be given by the Bank
to one Mrs. Nawzat A. Al Qudsi. It is not clear as to who this
Mrs. Nawzat A. Al Qudsi was and there is no evidence in regard
to her identity.
13.2 It may be mentioned here that the procedure for receiving

the surcharge has been dealt with at length in the Report of the
I.I.C under the Chairmanship of Mr. Paul Volcker investigating
into the manipulations in the Oil-for-Food Programme. It is not
50
necessary to repeat the details here as the said Report is widely
available to all.
13.3 Reverting to the letter written by Shri Sehgal on February

22, 2001 to the Jordan National Bank, Cyprus, it will be noted
that the said letter is under the signature of Shri Sehgal and that
has been verified by the bank. Pursuant to this letter, an amount
of USD 61,969 was transferred by a SWIFT MESSAGE from
the Chase Manhattan Bank, New York, USA. The said transfer
was made on the instructions of BNP Paribas, Paris at the
instance of Masefield AG which was the ordering customer. The
beneficiary of this transfer was Shri Andaleeb Sehgal. Upon
receipt of the money in the bank account of Shri Sehgal in the
Jordan National Bank, Cyprus an amount of USD 60,000 was
deducted and transferred to the bank account referred to above in
Amman.
13.4 While treating with the payment of surcharge under

Contract No. M/09/54 it may be mentioned that on May 10,
2001, Shri Andaleeb Sehgal wrote on the letter head of Hamdaan
Exports Limited, British Virgin Islands to Masefield giving the
details of the outstanding surcharge payable to SOMO.
According to this letter a total sum of USD 498,973 was due.
Out of this an amount of USD 60,000, referred to above, had
already been paid. The balance due was USD 438,973. The
letter, however, stated that a further five cents per barrel was
separately due in favour of the INDRUS Trading Company
Limited and would be invoiced for value on May 29, 2001.
51
13.5 Shri Sehgal received into the account of Hamdaan Exports
bearing Account No. 12367 with the Jordan National Bank,
Cyprus, an amount of USD 438,973 on May 15, 2001 from
Masefield AG through their bank, the Chase Manhattan Bank,
New York, USA. This amount, like the amount of USD 60,000
discussed above was further transferred on May 27, 2001 into
Account No. 500320/02 mentioned above held in the name of the
officials of SOMO. Thus the total amount of surcharge paid to
the officials of SOMO under the Contract No. M/09/54 was USD
498,518.
13.6 The oil under this Contract was lifted on two dates namely
April 17, 2001 when 300,000 barrels of oil were lifted by the
vessel M T Hellspont Orpheum and on April 30, 2001 when
1,635,892 barrels of oil were lifted by the vessel M T Arcadian.
13.7 The oil under this Contract was not lifted by Masefield AG
but by a company by the name of M/s. Vitol SA who had entered
into a contract with it sometime in March, 2001 for a price of
USD 0.36 per barrel over and above the price fixed by the UN.
Out of this, Vitol SA assigned 1,700,000 barrels of oil to Vitol
Asia Private Limited (Vitol Asia) who lifted 1,635,892 barrel of
oil. Against the invoice dated May 11, 2001 raised by Masefield,
Vitol Asia paid an amount of USD 588,921.12 on the lifted
quantity of 1,635,892 barrels of oil at 36 cents per barrel. The
balance of 3,00,000 barrels of crude oil was lifted by Vitol at a
52
premium of 41 cents per barrel over and above the official selling
price fixed by the United Nations. Vitol Asia paid a premium of
USD 1,23,000 against invoice dated April 20, 2001 of M/s.
Masefield AG into Masefield’s account at Societe General, Paris.
13.8 The oil under the contract M/09/54 was for the destination
to the United States of America and / or Far East. This was
approved by the letter of the UN Overseer to Masefield dated
March 30, 2001. It will be recalled that there was a difference in
the rates 30 cents per barrel for supply to the USA and 25 cents
per barrel for supply to the Far East.
13.9 For the share of five cents per barrel of oil which was the
agreed commission payable to Hamdaan Exports Limited by
Masefield at the time of assigning the contract, an amount of
USD 96,785.99 was transferred by Masefield AG into the
account of INDRUS on June 6, 2001. The said money was paid
into the account of INDRUS Trading Company Limited, Jersey
in its account with Barclays Bank PLC, 13 Library Place, Jersey,
Channel Islands in Account No. 73427968. Of this amount an
amount of USD 7,000 was paid to Sehgal Consultants on June
11, 2001 into a Bank Account in India. A further sum of USD
89,000 was transferred to a company by the name of Coburg
Associate. On June 29, 2001, Coburg Associate transferred into
the bank account of Hamdaan Exports, New Delhi a sum of USD
40,000. The account of Sehgal Consultants to which the transfer
was made in the first instance is located in the Standard
Chartered Grindlays Bank, Greater Kailash, Part-I, and the
53
Account No. is 26329887. The details of the Bank Account of
Hamdaan Exports to which a transfer of USD 40,000 was made
by Coburg Associate SA through their bank Lloyds TSB,
London, is the State Bank of India, New Delhi branch bearing
Account No. 01000561249. Thus an amount of USD 47,000 was
received by Hamdaan Exports as the commission payable to it
for the execution of the Contract M/09/54.
13.10 In this regard it may be mentioned that George E. Curmi

raised an invoice of USD 9,679.46 in relation to Contract No.
M/09/54 at the agreed rate of US cents 0.5/bbl on a total quantity
of 1,935,892 barrels of oil. This invoice was dated May 22, 2001
and was raised on Masefield AG. Masefield, on its part,
authorized the payment to George Curmi on June 1, 2001 in
Pounds Sterling and authorized a sum of GBP 6,826.14 to be
paid as broker’s commission. Thus for his role in the negotiation
of Contract No. M/09/54, George Curmi received a sum
equivalent to USD 9,679.46.
CONTRACT No. M/9/120
14.0 At the time when Contract No. M/09/54 was being

implemented, Shri Andaleeb Sehgal wrote to SOMO on April 3,
2001 stating therein that Condition No. 2 of the letter dated
February 11, 2001 (referred to above) was in the process of
getting implemented and that he along with Shri Jagat Singh of
the Congress Party of India would like to visit Baghdad and
personally thank all the SOMO personnel concerned with the
54
Contract. The letter further stated that the two would like to
discuss the possibilities of roll-over quantities to be allocated to
them after successful lifting of the first tranche. For this purpose
he requested SOMO to give Visa support in his favour and for
Shri Jagat Singh of the Congress Party of India.
14.1 On April 13, 2001 Shri Andaleeb Sehgal once again wrote
to SOMO stating therein that Condition No. 2 of the letter dated
February 11, 2001 had been fulfilled and that all the conditions
of the letter dated February 11, 2001 stood satisfied.
14.2 On April 18, 2001, Masefield wrote to the Executive

Director General of SOMO giving authority to Shri Andaleeb
Sehgal to sign for a contract of crude oil under the UN Oil-for-
Food Programme. The authority was valid until May 14, 2001.
14.3 It appears that after the execution of the contract and during
the successful lifting of oil under Contract No. M/09/54,
negotiations had been held between Masefield and Shri Sehgal
for obtaining another contract from SOMO for the allocation of
oil. In this, it seems that Shri Jagat Singh also joined. The
modus followed was similar to the one followed in the earlier
contract. It is possible that in view of the success of the parties
in obtaining and lifting oil, and the payment of the surcharges to
the officials of SOMO, they decided to continue obtaining
contracts of oil from SOMO. To this end, a letter of authority
was given by Masefield in favour of Shri Andaleeb Sehgal to
negotiate, execute, deliver and sign a contract for and on behalf
55
of Masefield AG. It needs to be mentioned here that though the
letter of authority is issued by Masefield, it would not have
obtained an allocation of oil had Shri Andaleeb Sehgal not been
involved in the procedure since the officials of SOMO were to
allocate oil only to Hamdaan Exports, a company which had the
confidence of Shri Natwar Singh when he had recommended the
same to the Minister of Oil, Iraq during his visit there in January,
2001.
14.4 The preparations for the visit of Shri Jagat Singh and Shri
Andaleeb Sehgal to visit Iraq during the month of April-May,
2001 started to fructify sometime around the middle of April
2001. A letter was issued by Shri Natwar Singh on the letter-
head of the All India Congress Committee on April 26, 2001.
The letter is addressed, like the previous one, to the Minister of
Oil, Iraq. The letter reads as follows:
“Excellency,
I am sending this letter with my son K. Jagat Singh who is
General Secretary of the Youth Wing of the Congress Party. He
and his cousin Andaleeb Sehgal were with me when I called on
you about three months ago. Jagat and his cousin will tell you
how much I have appreciated your help and cooperation which I
hope will continue.
56
With warm regards and greetings on the occasion of the
birthday of H.E., The President of Iraq.
Yours sincerely,
Sd/-
(K. Natwar Singh)
H.E. Dr. Amer Rasheed
Minister of Oil
Iraq”
14.5 Attached to this letter of Shri Natwar Singh was a

resolution on the letter-head of the Indian Youth Congress
bearing the name K. Jagat Singh, General Secretary. The
resolution was an extract from “Foreign Policy Resolution
Concerning the Middle East.” Also mentioned on the letter was
“All India Congress Committee Plenary Session, Bangalore – 14-
15 March, 2001. The essence of the extract was that the
Congress Party supported Iraq and Palestine in their struggle in
the Middle East. It stated that, “the Indian National Congress
supported the Government’s bilateral attempts to restore whole-
some relationship of India with Iraq……… The Congress Party
unequivocally calls for termination of sanctions.” The letter
further mentioned the visit of the Congress Party delegation to
Iraq and that it was fortunate to interact closely with the Iraqi
leadership and receive warm gestures of friendship from the
people of Iraq.
57
14.6 It is clear that this was an attempt to show to the officials of
Iraq that the policies of the Indian Congress were “Iraqi friendly”
and Shri Natwar Singh and Shri Jagat Singh enjoyed a
significant standing in an important political party, which was
well-known in the world, and which was ardently friendly and
sympathetic to the cause of the Iraqi Government, party and
people, and was actively involved in their support.
When asked about this letter, Shri Natwar Singh admitted his
signature on it but stated that he did not remember at any point of
time having written this letter. He also pointed out that in the
letter Shri Andaleeb Sehgal is wrongly referred to as “cousin” of
Jagat Singh, which in fact he is not. Be that as it may, once Shri
Natwar Singh admits the signature on the letter to be his, there
can be no doubt that he was the author of the letter. The letter
was carried by Shri Jagat Singh personally when he visited Iraq
between April 29, 2001 to May 4, 2001. Even Shri Andaleeb
Sehgal visited Iraq at the same time alongwith Shri Jagat Singh.
The copy of the letter clearly shows in Arabic that it was
received by the concerned officials in Iraq.
14.7 Shri Jagat Singh and Shri Andaleeb Sehgal were asked
about this letter and they both denied possessing any knowledge
about it. In fact, Shri Jagat Singh stated he did not travel with
Shri Sehgal and that he had gone for a separate and independent
purpose to Iraq which was a political purpose, namely to attend a
Conference. Shri Andaleeb Sehgal stated that he had gone to
Iraq quite independently to further his business interests in
58
various commodities and that he did not meet Shri Jagat Singh
while he was there.
14.8 A crucial piece of evidence which speaks about the visit of

Shri Sehgal and Shri Jagat Singh to Baghdad in connection with
oil is a letter dated May 5, 2001 written by Shri Andaleeb Sehgal
on behalf of Hamdaan Exports to the Executive Director
General, SOMO. The subject matter of the said letter is two
million barrels Basrah Light. The letter states that Shri Sehgal
would like to thank all persons concerned for the cooperation
during the recent visit to Baghdad and then states as follows:
“This refers to our meeting with His Excellency Dr. Ameer

Mohd. Rasheed (Honourable Minister of Oil) where we were
allocated two million barrels Basrah Light. As decided in your
offices on Thursday the 3rd May, in the presence of Mr. Jagat
Singh of the Congress Party, we await by fax a copy of the
contract by Monday/Tuesday next week.”
14.9 The aforesaid letter clearly states that a meeting was held in
the offices of the Iraqi Oil Minister where Shri Jagat Singh of the
Congress Party was also present. In the said meeting a decision
was taken by the Iraqi Oil Minister to allocate two million barrels
of oil to Hamdaan Exports. It is thus clear that the letter speaks
not only about the meeting but also about the presence of Shri
Jagat Singh with the particular emphasis that he belonged to the
Congress Party. It is evident that the making of the allocation
was influenced by Shri Natwar Singh’s letter to the Iraqi Oil
59
Minister to which letter an extract was appended of a resolution
of the Congress Party at its Plenary Session.
14.10 The fact that Shri Jagat Singh and Shri Andaleeb Sehgal
traveled together to Iraq is testified by Shri H.C.S. Dhody, the
then Ambassador of India to Amman. Shri Dhody stated before
the Inquiry Authority that he recalled that sometime in April end-
early May 2001, Shri Jagat Singh accompanied by Shri Andaleeb
Sehgal had called upon him at his residence in Amman and
sought his help to enable them to travel to Baghdad. Shri Dhody
further stated that he extended all the necessary help to them to
travel to Baghdad but did not hear from the two again.
14.11 The other material to show that the visit of Shri Jagat
Singh and Shri Sehgal was for the purpose of obtaining oil, is a
letter written by Mr. Nick Swan of Masefield Ltd. The letter was
written on June 4, 2001 to SOMO and it refers to the meeting
Shri Sehgal had with the officials of SOMO in May concerning
the “Political allocation” of two million barrels of Basrah Light
Crude Oil. The letter went on to say that Shri Sehgal would be
visiting again soon and would like Nick Swan to accompany him
with particular reference to Contract No. M/09/120.
14.12 The Inquiry Authority is conscious of the fact that

Contract No. M/09/120 does not fall within the scope of its
Terms of Reference. The reason why the aforesaid Contract has
been treated in detail here is to demonstrate that there was a
ready and constant willingness in Shri Natwar Singh to provide
60
such support as he could to the efforts of Shri Jagat Singh and
Shri Andaleeb Sehgal to obtain allocations of oil from the Iraqi
Oil Minister and SOMO.
14.13 Another reason for dealing with Contract M/09/120 is to

close the gap between Contract No. M/09/54 and M/10/57 and
with Contract M/09/120 in between to demonstrate the existence
of a continuity of interest of modus and of interaction with Iraqi
authorities between M/09/54 and M/10/57.
14.14 The close support which Shri Natwar Singh provided to

Shri Jagat Singh and Shri Sehgal provided an impression in the
minds of the Iraqi authorities that it was Shri Natwar Singh who
was the principal actor in the entire project. That impression
appears clearly in the letter dated May 9, 2001 written by the
Executive Director, SOMO to the Oil Minister in which a
reference has been made to two million barrels of oil having been
allocated to Masefied in favour of Shri Natwar Singh of the
Congress Party. The part played by Shri Natwar Singh may have
been more limited in fact, that of a facilitator, but the Iraqi
authorities saw no such limitation.
14.15 Reverting to the actual events on the ground, it may be

mentioned that Shri Andaleeb Sehgal wrote to SOMO on May
31, 2001 in connection with Contract No. M/09/120 and stated
that they were ready to fulfill the initial conditions under the new
contract as per the nominated procedures and structures detailed
in Baghdad. For this purpose he requested for Visa support not
61
only in his favour but also in favour of Shri Jagat Singh and one
Shri Mohd. Asad Khan. The proposed dates of visit were June 7
to June 15, 2001. Once again he wrote that they would want to
personally thank the SOMO personnel and discuss possibilities
of other future contracts.
14.16 It is in this connection that the letter dated June 4, 2001

was written by Masefield to SOMO in which reference had been
made to the visit of Shri Andaleeb Sehgal to Baghdad. This
letter had already been dealt with above.
14.17 For the execution of this contract bearing No. M/09/120 a

Deed of Assignment was entered into on May 2, 2001 between
Hamdaan Exports Limited, British Virgin Islands and Masefield
AG wherein, like in the case of Contract No. M/09/54, all the
rights of Hamdaan Exports Limited stood assigned to Masefield
AG for the payment of a fee to Hamdaan Exports Limited. This
contract was signed by Shri Andaleeb Sehgal on behalf of
Hamdaan Exports, who also executed a Power of Attorney dated
May, 2001 in favour of Masefield AG. The fee payable under
this contract is identical to the one paid under Contract No.
M/09/54 referred to above. A copy of this letter has been made
available to the Inquiry Authority by Shri Aditya Khanna, who
annexed it to his affidavit dated March 18, 2006.
14.18 Now, it appears that Contract No. M/09/120 did not result
in the lifting of the oil. It is in this regard that Shri Sehgal wrote
to SOMO on May 21, 2001 seeking visa support for himself, Shri
62
Jagat Singh and Mohd. Asad Khan. As stated earlier the
proposed visit to Baghdad was scheduled to take place between
June 7 to 15, 2001. However, on June 6, 2001, SOMO wrote to
Masefield in response to a letter of Masefield dated June 4, 2001,
and suggested that Masefield postpone the visit. In the event, the
visit of Shri Sehgal, Shri Jagat Singh and Mohd. Asad Khan did
not take place between June 7 to 15, 2001
14.19 However, since the contracts stood executed on May 24,

2001 Shri Andaleeb Sehgal wrote to Masefield AG on behalf of
Hamdaan Exports Limited, British Virgin Islands under the
subject “Request for initial payments”, stating:
“Pursuant to our assignment dated 2nd May, 2001 under SOMO

contract No. M/9/120 covering the lifting of 2 million barrel of
Basra Light Crude, we hereby request that you please arrange to
make an initial payment to us of USD 3 cents per barrel, being a
sum of USD 60,000.”
14.20 It appears that the said payment was made by Masefield

into the account of Hamdaan Exports. It seems. however, that no
further payments were made into this account. An amount of
USD 59,973 was received into the account of Hamdaan Exports
Limited bearing No. 12367 with the Jordan National Bank,
Cyprus. This amount was further transferred upon the
instructions of Shri Sehgal to the Account No. 500320/02 with
the Jordan National Bank. What followed thereafter is lost in the
mists of mystery. It does not appear that any oil covered by this
63
contract was lifted. It appears that the contract strayed into the
sand.
CONTRACT No. M/10/57
15.0 The events for the execution of Contract No. M/10/57

began sometime in July, 2001 and overlapped with the events
relating to Contract No. M/09/120. Shri Andaleeb Sehgal wrote
on July 26, 2001 asking as to what dates would be suitable to
SOMO for Shri Sehgal and possibly others to visit the office in
Baghdad.
15.1 On July 30, 2001, Masefield AG wrote to the Executive

Director of SOMO informing it that Shri Andaleeb Sehgal had
full authority and power to sign for and in the name of Masefield
AG and to represent it in connection with the negotiation,
execution, delivery and signing of a contract.
15.2 On August 11, 2001 upon request being made by Shri

Andaleeb Sehgal for the issuance of a visa in his favour and in
favour of Mohd. Asad Khan, SOMO wrote to the Iraqi Embassy
at New Delhi requesting the issuance of a visa for the two.
It appears that after due preparation, Shri Andaleeb Sehgal

and Mohd. Asad Khan traveled to Baghdad to visit the offices of
SOMO to seek and obtain another allocation of oil.
64
15.3 As was done in respect of all previous contracts, this time
too Shri Andaleeb Sehgal obtained a letter written by Shri K.
Natwar Singh addressed to the Oil Minister of Iraq. The letter
was dated August 16, 2001 and was, as were the earlier two
letters, written on the letter head of the All India Congress
Committee. The only difference on the letter head this time was
that the printed figure of “24” preceding “Akbar Road” had been
crossed out and in place the numeral “1” was substituted. The
address now read: “1, Akbar Road”. When the said letter was
shown to Shri K. Natwar Singh, he admitted his signature on it
but denied writing the contents of the letter. He pointed out also
that the said crossing of “24” and it being replaced by “1”
indicated that it was unlikely that he could have written the said
letter.
15.4 Now, it appears that when Shri K. Natwar Singh attended

the dinner at the residence of the Indian Ambassador at Amman,
he signed the Visitor’s Book kept at the Embassy. Against his
name and signature in the Book he himself set down his address
as “1, Akbar Road, New Delhi”. When Shri K. Natwar Singh
was confronted with this fact, he stated that he was working for
the Indira Gandhi Trust, the office of which was located on 1,
Akbar Road.
65
15.5 The letter dated August 11, 2001 reads as follows:
“Excellency,
I would like to present my greetings and congratulate you on

the re-election of His Excellency President Saddam Hussein as
the Leader of the Arab Ba’ath Socialist Party. I am sending this
letter with Mr. Andaleeb Sehgal, who has come to Baghdad to
continue the cooperation extended by yourself.
I would like to take this opportunity to reaffirm our solidarity
with the Arab Ba’ath Socialist Party and the people of Iraq.
With warm regards and greetings,
Yours sincerely
(K. Natwar Singh)
H.E. Dr. Amer Mohammed Rasheed,

Minister of Oil
Government of Iraq
Baghdad
15.6 Armed with the aforesaid letter, Shri Sehgal and Mohd.
Asad Khan left for Baghdad and arrived there on or about August
18, 2001. On August 20, 2001, Mohd Asad Khan, on the letter
head of Hamdaan Exports, wrote to the Executive Director
General, SOMO on behalf of Hamdaan Exports with reference to
one million barrels Kirkuk Crude Oil respecting which Hamdaan
Exports had authorized Masefield AG to sign and execute a
66
contract on his behalf. At the same time, Hamdaan undertook to
fulfill all conditions as required by SOMO.
15.7 Contract No. M/10/57 was entered into on August 21, 2001
for one million barrels of Kurkut Crude Oil. The contract was
signed by Shri Sehgal on behalf of Masefield AG. Shri Sehgal
gave an undertaking to SOMO on behalf of Hamdaan to issue a
bank guarantee for the payment of the surcharge in respect of one
million barrels, which bank guarantee was to be submitted to
SOMO 10 days prior to the date of each lifting. He also
undertook to pay into an account nominated by SOMO the
surcharge in the amount of 0.25USD/bbl net for the quantities
loaded for Europe and 0.30USD/bbl net for the quantities loaded
for US destinations, which payment would be effective within 30
days from the Bill of Lading for each shipment to be loaded
under Contract M/10/57.
15.8 It remains to be stated here that on August 21, 2001 the

Executive Director, SOMO wrote to the Iraqi Oil Minister
seeking the approval of the allocation of 1 million barrel of
Kirkuk Crude Oil under Contract M/10/57 “for the benefit of the
Indian Congress Party”. The said letter was approved by the
Iraqi Oil Minister and Contract No. M/10/57 was sent for
approval to the United Nations Overseer.
15.9 How the name of Indian Congress Party came to be

mentioned in this letter is not known. However, what appears to
be the reason is that Shri K. Natwar Singh and Shri K. Jagat
67
Singh so projected themselves that the Iraqi authorities formed
the impression that Shri K. Natwar Singh and Shri K. Jagat Singh
were representatives of the Congress Party. The Inquiry
Authority has absolutely no evidence whatsoever to link the
Congress Party to the transactions discussed in this Report and
except for the fact that Shri K. Natwar Singh and Shri K. Jagat
Singh belonged to the Indian Congress Party there is not a shred
of evidence to link the Congress Party to the said transactions.
The Inquiry Authority believes upon examination of all the
documents and material which exist before it that no wrong-
doing can be attributed to the Congress Party.
15.10 The lifting of the oil under this Contract, after the
necessary approvals had been obtained from the United Nations,
was done on November 10, 2001 when the vessel M T Front Sun
Loaded 1,000,896 barrels of oil. Thus the entire oil contracted
under this contract was loaded and taken away in one day. For
this purpose it may be stated that Masefield entered into a
contract with M/s. Vitol Bahrain EC at the official selling price
fixed by the UN plus 35 cents as premium. For this purpose they
paid an amount of USD 350,313.60 @ 35 cents per barrel to
Masefield AG.
15.11 As regards the payments to be made to Hamdaan Exports

for their role in the procurement of contract and for the payment
of surcharge to SOMO, Shri Andaleeb Sehgal on the letter head
of Hamdaan Exports Limited, British Virgin Islands, wrote to
Masefield AG on December 4, 2001 seeking payment of a sum
68
of USD 250,224 @ 25 cents per barrel for 1,000,896 barrels.
From the total due, an amount of USD 60,000 was deducted and
the total due was USD 190,224. This payment was brought into
the account No. 12367 in the name of Hamdaan Exports Limited
in the Jordan National Bank, Cyprus and for the reference of
Mrs. Nawzat. The letter stated further that another 5 cents per
barrel would be due separately in favour of INDRUS Trading
Company Limited.
15.12 For the fee due at US 5 cents per barrel, a separate invoice
was raised by Shri Andaleeb Sehgal on the letter head of
Hamdaan Exports Limited, British Virgin Islands. The amount
mentioned in this letter of December 4, 2001 was USD
50,044.80. Instructions were sent to pay the said amount to
Barclays Bank PLC, Jersey, Channel Islands in the account of
INDRUS Trading Company Limited bearing Account No.
734279666.
15.13 At this point it may be mentioned that the deduction of

USD 60,000 claimed in the first invoice appears to relate to the
payment already made in the month of June 2001 under Contract
No. M/09/120, which, it seems, did not go through, and since
payment had been effected to the officials of SOMO it was
difficult to get it reimbursed from them. It is for this purpose
that the amount payable under the new Contract M/10/57 was
reduced accordingly.
69
15.14 On December 4, 2001 George Curmi wrote to Harvey
Foster of Masefield informing him that he had spoken to
Andaleeb Sehgal and it was necessary to split the two amounts
since they went to “different areas”. It also mentioned that USD
60,000 had been deducted. In response to this, on December 5,
2001, Mr. Curmi was informed about the receipt of the two
Hamdaan invoices. It was, however, stated that Masefield would
like to pay the total amount of the two invoices to Hamdaan’s
account per the larger invoice. Masefield, it appears, did not
want to pay to the account of a third party with whom they had
no relationship. It also mentioned that the two invoices be
generalized with thedescription, “To consultancy fees in respect
of crude oil loaded in November, 2001, being US
Cents………per barrel on 1,000,986 net barrels lifted”.
15.15 Accordingly, a revised invoice was sent by Shri Sehgal to

Masefield AG. This invoice was a consolidated invoice unlike
the previous two invoices that had been raised. As per this
invoice a sum of USD 300,268.80 was raised. Reduced from this
amount was an amount of USD 60,000. The total balance due
and payable by Masefield was USD 240,268.80, which was to be
paid into the account of Hamdaan Exports Limited, maintained
in the Jordan National Bank, Cyprus in account No. 12367.
15.16 Accordingly, Masefield issued a payment authorization

dated December 6, 2001 ordering that an amount of USD
240,268.80 be paid into the aforesaid bank account of Hamdaan
Exports Limited. The reference given in the authorization slip
70
was M/10/57 and the purpose of payment was shown as
“broker’s commission”.
15.17 The amount of USD 240,241.80 was received into the

account of Hamdaan Exports Limited on December 10, 2001.
Shri Andaleeb Sehgal wrote to the Manager of the Jordan
National Bank on December 10, 2001 on the letter head of
Hamdaan Exports Limited, British Virgin Islands informing him
that an amount of USD 240,268.80 would be received on
December 10, 2001. Of this amount, an amount of USD
190,224.00 was to be paid to the credit of Account No.
500320/02 of the Jordan National Bank and reference was to be
made to Mrs. Nawzat A. Al Qudsi. Accordingly, on December
12, 2001 an amount of USD 190,450 including commission was
debited from the account of Hamdaan Exports Limited and the
amount was transferred to the Account No. 500320/02.
15.18 For the balance amount of about USD 50,000 Shri Sehgal
wrote on the very same day to the Manager, Jordan National
Bank, Cyprus asking him to debit a sum of USD 49,500/- and
transfer it to the account in Barclays Bank PLC, Jersey, Channel
Islands. It was to be credited to the account of INDRUS Trading
Company Limited in the Account No. 734279666. As per the
instructions received the Jordan National Bank, Cyprus
transferred the said amount to the account of INDRUS Trading
Company Limited. The amount of USD 49,461.24 was received
in the accounts of INDRUS on December 14, 2001. Of this
amount, a sum of USD 17,500 was transferred to the account of
71
Hamdaan Exports in India. A sum of USD 14,500 was paid to a
Consultant by the name of John Ball of Fynnmores on December
21, 2001. The remaining money was retained by INDRUS.
16.0 At this point the Inquiry Authority has been compelled to

conclude its examination of the matter having regard to its
inability to obtain further evidence. The Inquiry Authority
proceeds now to answer the Terms of Reference.
TERMS OF REFERENCE ANSWERED
16.1 First Term of Reference

To inquire into the sources of information, materials and
documents that were available with the Independent Inquiry
Committee (appointed by the Secretary General of the United
Nations to investigate the administration of the UN Oil-for-Food
Programme) in its Fifth and Final Substantive Report (including
the Tables) pertaining to contracts bearing number M/09/54 and
number M/10/57 and to give its opinion on the authenticity and
reliability of the said sources, materials and documents, and
whether, in its opinion, the purported transactions in oil are
genuine or not.
16.2 To answer the first part of the First Term of Reference it

appears that the sources of information, materials and documents
were the documents, copies of which were prepared and
authenticated under the seal of the United Nations and made
available to the Directorate of Enforcement in the Ministry of
72
Finance, Government of India. These copies were received in
two sets. The first set was received in November, 2005 and the
second set was received in January, 2006. They were made
available to the Directorate of Enforcement on condition that
they would be put to official use only and not be made public in
any form. Thereafter copies were supplied by the Directorate to
the Inquiry Authority.
The documents sent by the Independent Inquiry Committee, New

York, in November 2005 to the Directorate of Enforcement are
set out in Annexure-A hereto. The documents sent by the
Independent Inquiry Authority, New York, in January, 2006 are
set out in Annexure-B hereto.
16.3 As mentioned earlier, in July, 2006, Shri Siddhartha Dave,

legal counsel to the Inquiry Authority with Mrs. S. Pillai, IAS,
Secretary to the Inquiry Authority, were deputed to meet Mr.
Paul Volcker, Chairman, Independent Inquiry Committee and
members of the staff involved in the preparation of the
Independent Inquiry Committee Report for clarification relating
to various aspects of the Report. During Shri Dave’s interaction
with the Members of the Independent Inquiry Committee, New
York, various sources of information and documents were
explained in the following manner:
A) Oil-for-Food Programme Documentation;
B) Iraqi Documentation;
C) Company Documentation;
D) Financial Documentation.
73
Oil-for-Food Programme Documentation
Under this heading the following documents were included:
1) The Contract for allocation of oil;
2) The UN Oil Overseer’s approval;
3) The various correspondence that may have been exchanged
between the company with whom the contract was signed and
the UN;
4) The Bills of Lading;
5) Invoices;
6) Letters of Credit;
7) Any other documents.
The aforesaid documents helped to establish as to who had been
allotted the oil, for what quantity, when the UN approval was
given, when the Letter of Credit opened, and on which date was
the oil loaded.
B. Iraqi Documentation
1) These consisted of documents obtained directly from the
Ministry of Oil and the Record Facilities i.e. the Archives,
where all the records of SOMO were stored.
These documents had been independently authenticated, at
times, by the authors of the documents i.e., the persons who
actually wrote the documents when they were interviewed
by the IIC. For example, the IIC interviewed Ameer Mohd.
Rasheed, the Iraqi Oil Minister, who was shown the
approval letters, which were prepared by SOMO showing
the names of the non-contractual beneficiaries. He agreed
74
and identified the practice and the approval letters shown to
him.
The records were reviewed in details and were found:
-internally consistent;
-consistent across Ministries in Iraq;
-consistent with the records kept by the UN, banks,
parties and independent account of transactions and
related events.
2) Iraqi Oil Allocation Lists – prepared for each phase of the

Oil-for-Food Programme by the Iraqi officials, which
consisted of the summary of the allocations made by the
Ministry of Oil.
Started at the beginning of each phase except for the IX
Phase.
Presented to the Iraqi Leadership or the “Command
Council”
Modified if necessary and approved by the leadership.
3) Approval letters from Director of SOMO - sometimes the

letters of recommendations themselves were attached to the
Approval letters so as to indicate to the Oil Minister upon
whose insistence had the allocation been made. In other
case, there were oral requests by the concerned Minister to
the Oil Minister or by the Oil Minister directly. These were
sent by the Director of SOMO to the Minister of Oil and
usually done within days of conclusion of contract. It
included a summary of the contract.
75
4) Correspondences:
Nomination letters – Letter from beneficiary or his
representatives to SOMO nominating a company or an oil
company to lift the oil;
Letters undertaking to pay surcharge, which remained with
the company to whom the allotment was made by SOMO
and may have subsequently assigned to a UN approved
company. Normally done when Iraqi did not trust the
company.
Letters introducing beneficiaries.
Letters referring to meetings with beneficiaries or his/her
representative,
5) Surcharge payments:
Bank advices and SWIFT instructions from Jordan National
Bank or Fransbank (Labanon), being the two main banks
which were used for payment of surcharges;
Iraqi Embassy cash receipts for cash payments;
SOMO Surcharge payment ledger (database) – Ledger of
collection of surcharges by SOMO, which was prepared
during the Programme but printed out after the Programme;
Opening of a bank account in Jordan or Lebanon.
6) SOMO Summary Report – prepared in February 2004 by

SOMO. It explains the operation of the Oil-for-Food
Programme and the oil allocation system from the Iraqi
perspective. It includes attachments with lists of oil
allocation and surcharge collections.
7) Iraqi Oil Allocation Lists.
76
C. Company Documentation
1) This included the correspondences the company to whom the

allotment had been made or the company which lifted the oil
with:
SOMO
Other Companies
Middlemen/Traders
Financiers
2) Contracts between the ultimate buyer or financier

3) Underlying Letter of Credit.
D. Financial/Bank Documentation
1) Surcharge Payments:
Collection of Surcharges at SOMO
Bank records for payments of surcharges
2) Bank records related to financier or purchaser of oil.
Thus, it is evident from the above data and the documents listed
above, that the information and material available with the
Independent Inquiry Committee was considerable and sufficient
to carry out its inquiry. The members of the Independent Inquiry
Committee were asked whether any documents other than the
ones provided by the Independent Inquiry Committee were
available with it. The answer provided was all those documents,
77
which pertained to the two contracts being inquired into by the
Authority, had been made available to the best of their ability. It
may be possible that documents other than those provided to the
Authority may exist but the Independent Inquiry Committee was
not aware of them and they had provided all the materials that
were available with them.
16.4 The second part of the first Terms of Reference requires

the Inquiry Authority to give its opinion on the authenticity and
reliability of the sources, materials and documents available with
the Independent Inquiry Committee, New York, on the basis of
which it prepared its Report in relation to Contracts No. M/09/54
and No. M/10/57. In regard to this aspect, the Independent
Inquiry Committee, New York, explained that all the documents
which were available with it had been obtained through and with
the help of the United Nations directly from Iraq. They have
been obtained primarily from the Ministry of Oil, State Oil
Marketing Organization (SOMO) and some other sections of the
Iraqi Government Regime. These documents in Arabic had been
translated into English with the help of the United Nations.
Some of the documents were available with the United Nations
itself, for example, the contracts and approvals that were to be
provided by the United Nations Overseer. There is no doubt
about the authenticity of these documents since they were
available in original. The Independent Inquiry Committee stated
that the Committed had conducted interviews of many officials,
some of whom continue to work in Iraq, to establish the
authenticity of the documents. These witnesses were confronted
78
with the documents and on no occasion did anyone raise any
objection in regard to the said documents. So far as it was
concerned, the Independent Inquiry Committee, New York,
stated that the authenticity of the documents stood established.
The Independent Inquiry Committee, New York, pointed out that
the names of the officials interviewed could not be made public
on account of consideration of their safety since they continue to
work in Iraq.
It is observed further that if any discrepancy was found in the
documents, it looked into the matter with great care and
conducted a due diligence in it. It also availed the services of the
Forensic Accounting Unit to solve the financial aspects of the
inquiry. It also had the assistance of the Jordan National Bank,
which helped in establishing the financial aspects of the matter.
The Committee went on to observe that the pattern was

established by the witnesses from Iraq, who informed the
Committee about the modus operandi followed by the Iraqi
regime in levying and collecting surcharges. This was
corroborated by the information that was made available by the
Companies involved and the banks through which the money
was routed. After examining these, the Independent Inquiry
Committee, New York, discerned a clear pattern followed in
almost all the cases.
16.5 From the aforesaid, the present Inquiry Authority is of

opinion that the documents available with the Independent
Inquiry Committee were authentic and reliable. The documents
79
were genuine and full reliance could be placed upon them by the
Inquiry Authority.
16.6 The question whether the purported transactions in oil

covered by Contracts No. M/09/54 and No. M/10/57 were
genuine or not is resolved when regard is had to the material
examined by the Inquiry Authority and its findings as herein
above recorded in the substantive text of this Report, the Inquiry
Authority finds that the aforesaid transactions in oil were
genuine.
16.7 Second Terms of Reference

To inquire into the aforesaid information, materials and
documents and any other material or evidence that may be
obtained by the Inquiry Authority, and to give its opinion
whether the refernces to Indian entities and individuals
pertaining to Contracts bearing Number M/09/54 and Number
M/10/57 are justified or not.
16.8 The narration of events set out earlier in this Report

contains a comprehensive analysis of the sequence of events
drawn from the documentary evidence before the Inquiry
Authority which consisted of authenticated copies of documents
available with the Independent Inquiry Committee, New York,
and also documents obtained from different sources both in India
and abroad. The Inquiry Authority obtained documents from the
Government of Jordan relating to the Jordan National Bank,
Cyprus, documents received from the Government of Iraq and
80
documents received from the Ministry of External Affairs,
Government of India, New Delhi. Besides the aforesaid
documentary material, the Inquiry Authority referred to material
appearing in affidavits filed by a large number of persons who
appear to have been associated directly or indirectly with the
making of the two contracts under inquiry. The detailed analysis
made by the Inquiry Authority to all such material gives rise to
the finding that Shri Natwar Singh, mentioned as a non-
contractual beneficiary with respect to Contract No. M/09/54,
was a beneficiary in so far that the role played by him in
influencing and facilitating the procurement of the Contracts had
fructified. There is no material to show that Shri Natwar Singh
derived any financial or other personal benefit from the
contracts. As regards the Indian Congress Party, it has been
shown as a non-contractual beneficiary with respect to Contract
No. M/10/57. The Inquiry Authority has found no evidence that
the Congress Party was involved in the Contract and that it
derived any benefit at all from the Contract. Indeed, there is
nothing to show that the Indian Congress Party had anything to
do with the Contracts M/09/54 and M/10/57. Apparently, it has
been shown as a non-contractual beneficiary because that was the
impression created in the minds of the Iraqi authorities by reason
of the conduct of Shri Natwar Singh and Shri Jagat Singh and the
documents which they employed including the letters written by
Shri Natwar Singh to the Iraqi Oil Minister.
16.9 Consequently, the reference to Shri Natwar Singh with

respect to Contract No. M/09/54 is justified in the sense
81
explained earlier, while the reference to the Indian Congress
Party with respect to Contract No. M/10/57 is not justified at all.
16.10 Third Term of Reference

To inquire into the question whether any Indian entity or
individual received any money or other consideration from, or
paid any money or other consideration to, any government,
agency, company, firm or individual in connection with the
purported transactions in oil under the United Nations Oil-For-
Food Programme pertaining to Contracts bearing Number
M/09/54 and M/10/57.
16.11 It is found that under Contract No. M/09/54, an amount

of USD 61,969 was transferred by a SWIFT MESSAGE from
Chase Manhattan Bank, New York, USA, in March 2001. The
said transfer was made on the instructions of BNP Paribas, Paris,
the ordering customer being Masefield AG, London. The
amount was transferred to Account No. 12349 with the Jordan
National Bank, Cyprus, held by Shri Andaleeb Sehgal.
16.12 Of this amount in the account of Shri Sehgal in the Jordan

National Bank, Cyprus, an amount of USD 60,000 was deducted
and transferred to the Jordan National Bank, Amman, to the
credit of Account No. 500320/02. The Account Number referred
last was in the name of Saddam Z. Hassan and Ibrahim Ali
Shaiyeb of SOMO. This was also done in March 2001.
82
16.13 A further amount was received by Shri Sehgal into the
account of Hamdaan Exports Limited, bearing Account No.
12367 in the Jordan National Bank, Cyprus. This amount of
USD 438,973 was received on May 15, 2001 from Masefield AG
through their bank Chase Manhattan Bank, New York, USA.
This amount was transferred on May 27, 2001 into Account No.
500320/02 mentioned above held in the name of the officials of
SOMO. Thus the total amount of surcharge paid to the officials
of SOMO under the Contract No. M/09/54 was USD 498,518.
This mount was paid by Shri Andaleeb Sehgal.
16.14 With regard to receiving the commission under Contract

No. M/09/54, it is stated that the entities which received monies
were: Shri Aditya Khanna, Shri Andaleeb Sehgal, Sehgal
Consultants and Hamdaan Exports.
16.15 The money, a sum of USD 96,785.99 was transferred by

Masefield AG into the account of INDRUS on June 6, 2001.
The said money was paid into the account of INDRUS Trading
Company Limited, Jersey in its account with Barclays Bank
PLC, 13, Library Place, Jersey in Account No. 73427968. Of
this amount, an amount of USD 7,000 was paid to Sehgal
Consultants on June 11, 2001 at the bank account in India. A
further sum of USD 89,000 was transferred to a company by the
name of Coburg Associate, the details of which are not available
with the Inquiry Authority. However, on June 29, 2001, Coburg
Associate transferred into the bank account of Hamdaan Exports,
New Delhi, a sum of USD 40,000. The account of Sehgal
83
Consultants to which the transfer was made in the first instance is
located in the Standard Chartered Grindlays Bank, Greater
Kailash, Part-I and the Account Number is 26329887. The
details of the Bank Account of Hamdaan Exports to which a
transfer of USD 40,000 was made by Coburg Associate SA
through their bank Lloyds TSB, London is the State Bank of
India, New Delhi Branch bearing Account No. 01000561249.
Thus an amount of USD 47,000 was received by Hamdaan
Exports as the commission payable to it for the execution of the
Contract M/09/54. This amount, however, does not include the
amount retained by Shri Aditya Khanna at 1 cent per barrel of oil
as his commission in the account of INDRUS, to which he
admitted.
On August 9, 2001, an amount of USD 3793.52 was received

into the account of Hamdaan Exports with State Bank of India,
New Delhi. This amount had been transferred from Coburg SA
to Hamdaan Exports.
16.16 As regards Contract No. M/10/57, it may be mentioned as

follows:
16.17 Payment was made by Masefield into the account of

Hamdaan Exports for Contract M/09/120. However, it appears
that no further payments were made under this Contract. An
amount of USD 59,973 was received into the account of
Hamdaan Exports Limited bearing No. 12367 with the Jordan
National Bank, Cyprus. This amount was further transferred
84
upon the instructions of Shri Sehgal to the Account No.
500320/02 with the Jordan National Bank, which belonged to the
SOMO officials to whom surcharges were paid.
16.18 Masefield issued a payment authorization dated

December 5, 2001 ordering that an amount of USD 240,268.80
be paid into the bank account of Hamdaan Exports Limited in the
Jordan National Bank, Cyprus, in Account No. 12367. The
amount of USD 240,241.80 was received into the account of
Hamdaan Exports Limited on December 10, 2001. Of this
amount, an amount of USD 190,224.00 was to be paid to the
credit of Account No. 500320/02 of the Jordan National Bank
and reference was made to Mrs. Nawzat A. Al Qudsi.
Accordingly, on December 12, 2001, an amount of USD 190,450
including commission was debited from the account of Hamdaan
Exports Limited and the amount was transferred to the Account
No. 500320/02.
16.19 For the balance amount of about USD 50,000 Shri Sehgal
wrote to the Manager, Jordan National Bank, Cyprus, asking him
to debit a sum of USD 49,500 and transfer it to the account in
Barclays Bank PLC, Jersey, Channel Islands. It was to be
credited to the account of INDRUS Trading Company Limited in
the Account No. 734279666. The Jordan National Bank, Cyprus,
transferred the said amount to the account of INDRUS Trading
Company Limited. The amount of USD 49,461.24 was received
in the accounts of INDRUS on December 14, 2001. Of this
85
amount, a sum of USD 17,500 was transferred to the account of
Hamdaan Exports in India.
16.20 Thus, under Contract No. M/09/54 the total surcharges

paid by Hamdaan Exports Limited were USD 498,518. For the
Contract No. M/10/57, an amount of USD 250,032 was paid as
surcharges. Therefore, the total amount paid as surcharges after
going through the various documents is a sum of USD 748,550.
16.21 For their part, Shri Aditya Khanna and Shri Andaleeb
Sehgal received a total sum of USD 146,000 which amounts to
about 5 cents per barrel of oil. The entire amount was received
in the bank account of INDRUS Trading Company Limited
located in Jersey, Channel Islands. This was to be distributed in
the ratio of 4:1 between Shri Andaleeb Sehgal and Shri Aditya
Khanna.
As stated above, out of USD 146,000 an amount totaling USD

68,293 was received in the accounts of Hamdaan Exports and
Sehgal Consultants in India. For his share, Shri Aditya Khanna
received USD 32,558 which he retained in the accounts of
INDRUS.
17. Before closing this Report, the Inquiry Authority wishes to

place on record its grateful appreciation of the considerable
assistance, willing cooperation and indefatigable industry
contributed by all involved in the conduct and completion of the
Inquiry. Senior counsel have given freely of their precious time
86
and expertise and provided invaluable guidance at every stage.
Junior counsel have risen to their responsibilities and unsparingly
worked throughout the term of the Inquiry Authority providing a
useful collation of materials. In particular, the Inquiry Authority
is specially thankful to the Senior Counsel and the Legal Counsel
especially appointed to the Inquiry Authority. By their intimate
knowledge of the case as it unfolded and their deft handling of
the oral examination statements of persons appearing before the
Inquiry Authority they succeeded in marshalling and putting
together an invaluable volume of oral evidence. The Inquiry
Authority recognizes the dedicated effort, which was constantly
in evidence, of its Secretary, Director and the Under Secretary of
keeping the proceedings in good order at all times, drawing from
the wisdom of long experience and providing sound
administrative advice. Finally, the Inquiry Authority records its
deep appreciation of the sincere devotion and discretion of its
Personal Staff who, even beyond the call of duty, uniformly
provided the conditions necessary for the successful conduct of
the Inquiry and the preparation of this Report.
Aug. 3, 2006 (R.S. Pathak)

Justice R.S. Pathak Inquiry Authority
87
ANNEXURE – A
Documents sent by the Independent Inquiry Committee, New
York in November 2005 to the Directorate of Enforcement
SOMO Records (Hard Copy):

List of oil allocations to India for Phases 10 to 13 of the Oil-for-
Food Programme:
1. Selected and redacted pages from table of
allocation for Phase 10 dated 4/8/2001 (in
Arabic);
allocation for Phase 11 approved on 9/1/2002
(in Arabic)
allocation or Phase 12 approved on 21/5/2002
(in Arabic)
allocation for phase 13 approved on 18/11/2002
(in Arabic)
Documents related to allocations made to Natwar
Singh, Indian Congress Party and Reliance:
5. Letter dated February 13, 2001 from Saddam
Z. Hassan to the Oil Minister regarding
approval of Contract M/09/54 (Masefield)
6. Letter dated May 9, 2001 from Saddam Z.
Hassan to the Oil Minister regarding approval
of Contract M/09/120 (Masefield)
88
7. Letter dated August 21, 2001 from Saddam Z.
Hassan to the Oil Minister regarding approval
of Contract M/10/57 (Masefield).
Bank records related to payment of surcharges
associated with:
8. Jordan National Bank credit advice dated
March 13, 2001 showing depositor as Andaleeb
Sehgal and SWIFT
9. Jordan National Bank credit advice dated May
27, 2001 showing depositor as Hamdaan
Export
10. Jordan National Bank credit advice dated June
11, 2001 showing depositor as Hamdaan
Exports Limited and SWIFT; and
11. Jordan National Bank credit advance dated
December 12, 2001 showing depositor as
Hamdaan Exports Limited and SWIFT
Accounting opening records at Jordan National
Bank:
12. Jordan National Bank Accounts 500113,
500320 and 500866
B. Contract records (in electronic format):
1. Masefield AG: UN Treasury documents for
Contracts Number M/09/54, M/10/57.
89
ANNEXURE-B
Documents sent by the Independent Inquiry Committee, New
York in January 2006:
1. SOMO – Table of Categorization of Companies for
Phase IX (6 Dec. 2000 – 3 July 2001)
2. SOMO – Oil Allocation Table Phase X (4 July – 30
November 2001)
3. SOMO – Oil Allocation Table Phase XI (1 Dec. 2001 –
29 May 2002)
4. SOMO – Oil Allocation Table Phase XII (30 May 2002
– 4 Dec. 2002)
5. SOMO – Oil Allocation Table Phase XIII (5 Dec. 2002
– 3 June 2003)
6. SOMO Contract Approval Letters
i) Approval Letter M-12-81
ii) Approval Letter M-13-05
90
ANNEXURE - C
REPORT OF SIDDHARATHA DAVE, COUNSEL TO
THE JUSTICE R.S. PATHAK INQUIRY AUTHORITY ON THE
VISIT TO NEW YORK TO MEET THE MEMBERS OF THE
INDEPENDENT INQUIRY COMMITTEE OF THE UNITED
NATIONS UNDER THE OIL-for-FOOD PROGRAMME.
DAYS OF VISIT:
4TH JULY 2006
TO
8TH JULY 2006
NEW DELHI
17.7.2006
I, along with the Secretary to the Justice R.S.Pathak Inquiry
Authority (hereinafter referred to as the Authority), visited New York
from 04/07/2006 to 08/07/2006. I was authorized by Justice
R.S.Pathak himself to undertake the said visit, the purpose of which
was to meet the officials of the United Nations and the members of
the Independent Inquiry Committee (hereinafter referred to as IIC)
under the Chairmanship of Mr. Paul Volcker set up to inquire into the
United Nations Oil-for-Food Programme.
The visit was occasioned by the need to properly and correctly
answer the Terms of Reference, more particularly the Term of
Reference No.1, as mentioned in the Notification appointing the
Authority published in the Gazette of India: Extraordinary, Part I-
Section 1, New Delhi, November 11, 2005.
It needs to be stated at this stage that the role of the Secretary
to the Authority in this visit was to primarily facilitate the
meetings taking place.
The work – of interacting with the officials of the United Nations and
the members of the Independent Inquiry Committee under the
2
Chairmanship of Mr.Paul Volcker – was entrusted to me and it was I,
who had to ask the questions and get the answers. It must be
mentioned that the Secretary to the authority was present at the
meetings.
We arrived in New York from New Delhi at 1540 hours (New York
Time) and proceeded to our hotel, where we were for the rest of the
day. Our meeting with the members of the IIC was fixed for 6th July,
2006 at 10 a.m. The meetings had been arranged with the help of
the Permanent Mission of India to the UN.
We reached the office of the IIC located at 825 Third Avenue,
Fifteenth Floor, New York, New York at 10 A.M., where we were
introduced to Ms. Susan M. Ringler, Counsel to Committee and
Aleksandr N. Shapovalov, Deputy Counsel to the Committee. We
were then introduced to Mr. Paul Volcker, Chairman of the IIC. It
may be mentioned that as per the schedule provided to us, the
meeting with Mr.Volcker was to take place at 10:30 A.M. However,
Mr. Volckler chose to be present at the meeting from the very
beginning i.e., 10 A.M. and was present till 11:45A.M. The meeting
with the other Members of IIC concluded at about 1:15 P.M.
3
As stated above, the primary objective of the meeting was to find
answers in relation to the First Term of Reference, namely, to inquire
into the sources of information, materials and documents that were
available with the Independent Inquiry Committee and to give its
opinion on the authenticity and reliability of the said sources,
materials and documents.
The meeting began with the query posed by the IIC about the nature
of inquiry undertaken by the Authority and the need to meet the
Counsel for the Authority separately after they had already interacted
with the Directorate of Enforcement. I explained to them that the
nature of inquiry, as contemplated by the notification, was far wide
than the one undertaken by the Directorate of Enforcement, which is
limited by theprovision of Foreign Exchange Management Act
(FEMA). TheTerms of Reference of the Authority were all
encompassing though there may be some overlap between the two
inquiries i.e., by the Directorate of Enforcement and the Authority. It
was further explained that the Inquiry was a statutory one, the report
of which would be tabled before the Parliament of India and the
conclusions reached by it would have far reaching consequences.
After this, the Members were satisfied that the
4
nature of work of the Authority was very different with that
undertaken by the Directorate of Enforcement and we proceeded
with the meeting.
The first query that was put to them was with regard to the Report
itself: why had the name of Shri Natwar Singh and the Indian
Congress Party (the two non-contractual beneficiaries) not been
discussed in the two earlier Reports but in the main Report itself
and had any notices been issued to them?
The answer of the IIC was that prior to the Final Report being
published there were two other Reports, being interim reports, had
been published by the IIC. The First Report was more concerned
with the administrative manipulations inside the United Nations itself
in relation to the Oil-for-Food-Programme. The Interim report (First)
was concerned with the Procurement Procedure, which involved:
Escrow Account with Banque Nationale Paris (BNP); the Oil
Inspectors; and the Good inspector. It the examined the activities of
on Benon Sevan in relation to the Oil allocations. It further
proceeded to the Internal Audit, the Administrative Expenditure to
conclude with the Methodology. It also dealt with
5
the historical background of the Oil-for-Food Programme and the
mandate of the IIC.
The Second Interim Report mainly concentrated on Cotecna
Inspection S.A. and Kojo Anan and the inter se relationship between
the two. This Report contained few other chapters dealing with some
other entities. It did not deal with the Programme in general.
It was the Report published last ( the one with which the Authority is
concerned with) i.e., the Final Report, which was saved for the
manipulations and the related aspects of the Programme. It was a
comprehensive Report, which was deliberately saved for the last as
the culmination of the functioning of the IIC. The information had
been gathered by the IIC all throughout but the due to the nature of
the inquiry i.e., the length of it and the various interviews of Iraqi
officials conducted by it, that the Final Report was published. The
Final Report dealt with all the individuals, companies, entities
involved in the manipulations of the Oil for Food Programme. The
Final Report had eight tables which supported the main text and were
to be read with it.
6
As to why there was no discussion of the persons mentioned in the
Tables or why only some persons were profiled in the main body of
the text, the answer of the IIC was that those persons, companies
or entities were mentioned in the main body of the text who were
repeatedly involved in the manipulation of the Programme. They
were big/large Companies, influential international
entities/personalities, etc. It was not within the resources of the IIC
to profile every person or company in the main body of the Report
since that would be a gigantic task.
It is in this regard, that the question with regard to the notices was
answered. The Members of the IIC stated letters were sent to the
non-contractual beneficiaries, who were mentioned in the text of
the Report since IIC was directly making accusations against these
persons. The others, like those mentioned in the Tables, had not
been issued any notices since they were not mentioned in the main
body of the Report and no accusations as such had been made
against them.
The next question was with regard to the sources and information
available with the IIC and the authenticity of the documents that
were available with it. In this regard, I was informed that all the
7
documents that were available with the IIC had been obtained
through and with the help of the United Nations directly from Iraq.
They had been obtained primarily from the Ministry of Oil, state Oil
Marketing organization (SOMO) and some other Iraqi Government
regime. These documents were in Arabic and had been translated
into English with the help of the United Nations. Some of the
documents were available with the United Nations itself for
example, the contracts and approvals that were to be provided by
the United Nations Overseer. There was no doubt about the
authenticity of these documents since they were available in
original.
For the IIC, the documents that were available with them were
authentic and reliable. I was informed that they conducted
interviews of many officials, some of whom continue to work in
Iraq, to establish the authenticity of the documents. These
witnesses were confronted with the documents and at no occasion
did anyone raise any objections in regard to the said documents.
Thus, for the IIC, the authenticity of the documents was
established.
8
The IIC could not make public the names of the officials interviewed
on account of their safety since they continued to work in Iraq.
If IIC found any discrepancy in the documents, it looked into the
matter with great care and conducted a due diligence in it. It also
availed the services of the Forensic accounting Unit to solve the
financial aspects of the inquiry. It also had the assistance of Jordan
National Bank, which helped in establishing the financial aspects
of the matter.
The pattern was established by the witnesses from Iraq, who
informed the IIC about the modus operandi followed by the Iraqi
regime in levying and collecting surcharges. This was corroborated
by the information that was made available by Companies involved
and the banks, through which the money was routed. After
examining these, a clear pattern emerged, which was followed in
almost all the cases.
On the specific issue as to who is a non-contractual beneficiary, I
was informed that a non-contractual beneficiary was a person who
either for himself or someone else obtained the contract allocating
oil. This person was normally an influential person, who had close
ties with the higher ups of the Iraqi Government like the President,
9
Prime Minister, Oil Minister, etc. The allocation of oil may have
been made (like Contract Nos.M/9/54 and M/10/57) in favour of
someone else. In any case, the non-contractual beneficiary never
signed the contract. He either recommended another company,
which would directly lift the oil if it were approved by the United
Nations or assign it to a UN approved company. To SOMO and its
officials the allotment in the name of the person for whom the
allotment was initially made stood in its records. This was their
way of knowing for whom the allotment had been made and by this
way they were able to distribute oil in favour of those persons with
whom they had good equation and who supported their cause. As
stated earlier, a non-contractual beneficiary may be directly
involved in getting an allotment in his favour or may recommend
the name of another person or company. But to SOMO, it was the
name of the non-contractual beneficiary, which was maintained in
the records.
I was then shown a slide presentation by Mr.Alexandr N.
Shapovalov as to the documents that were available with the IIC
during its inquiry.
A) Oil-for-Food Programme Documentation
10
B) Iraqi Documentation
C) Company Documentation
D) Financial Documentation
A) Oil-for-Food Programme Documentation
Under this heading the following documents were
included:
1) The Contract for allocation of oil;
2) The UN Oil Overseer’s approval;
3) The various correspondence that may have been
exchanged between the company within whom the
contract was signed and the U.N.
4) The Bills of Lading;
5) Invoices;
6) Letters of Credit
7) Any other documents.
The aforesaid documents helped to establish as to who had
been allotted the oil, for what quantity, when the UN approval
given, when the Letter of Credit opened, on which date was
the oil loaded.
11
B) Iraqi Documentation
1) These consisted of documents obtained directly from the
Ministry of Oil and the Record Facilities i.e., the
Archives, where all the records of SOMO were stored.
These documents had been independently
authenticated, at times, by the authors of the
documents i.e., the persons who actually wrote the
documents when they were interviewed by the IIC. For
eg. the IIC interviewed Ameer Mohd. Rasheed, the Iraqi
Oil Minister, who was shown the approval letter, which
were prepared by SOMO showing the names of the non
-contractual beneficiary. He agreed and identified the
practice and the approval letters shown to him.
The records were reviewed in detail and were found:
- internally consistent;
- consistent across Ministries in Iraq;
- consistent with the records kept by the UN, banks,
third parties and independent account of
transactions and related events.
12
2) Iraqi Oil Allocation Lists – prepared for each phase of
the Oil-for-Food Programme by the Iraqi official, which
consisted of the summary of the allocations made by the
Ministry of Oil.
Started at the beginning of each phase except for
the IX phase.
Presented to the Iraqi Leadership or the
“Command Council”
Modified if necessary and approved by the
leadership.
3) Approval letters from Director of SOMO – sometimes the
letters of recommendations themselves were attached to
the Approval letters so as to indicate to the Oil Minister
upon whose insistence had the allocation been made. In
other case, there were oral requests by the concerned
Minister to the Oil Minister or by the Oil Minister
directly. These were sent by the Director of SOMO to the
Minister of Oil and usually done within days of
conclusion of contract. It included a summary of the
contract.
13
4) Correspondences:
Nomination letters – Letter from beneficiary or his
representatives to SOMO nominating a company or
an oil company to lift the oil;
Letters undertaking to pay surcharge, which
remained with the company to whom the allotment
was made by SOMO and may have subsequently
assigned to a UN approved company. Normally done
when Iraqi did not trust the company.
Letters introducing beneficiaries
Letters referring to meetings with beneficiaries or
his/her representative.
Bank advices and SWIFT instructions from Jordan
National bank or Fransbank ( Lebanon), being the
two main banks which were used for payment of
surcharges;
Iraqi Embassy cash receipts for cash payments;
SOMO surcharge payment ledger (database)
Ledger of collection of surcharges by SOMO, which
14
was prepared during the Programme but printed
out after the Programme;
Opening of a bank account in Jordan or Lebanon
6) SOMO Summary Report – prepared in February 2004 by
SOMO. It explains the operation of the Oil-for-Food
Programme and the oil allocation system from the Iraqi
perspective. It includes attachments with lists oil
allocation and surcharge collections.
7) Iraqi Oil Allocation Lists
C) Company Documentation
1) This included the correspondences the company to whom
the allotment had been made or the company or the
company which lifter the oil with:
SOMO
Other Companies
Middlemen/Traders
Financiers
2) Contracts between the ultimate buyer or financier
3) Underlying Letter of Credit
15
D) Financial/Bank Documentation
Collection of surcharges at SOMO
Bank records for payments of surcharges
2) Bank records related to financier or purchaser of oil.
The members of IIC were specifically asked about whether the
documents that were given to the Inquiry Authority were the only
documents that were available with them or were there any other
documents with the? The answer was that the documents that had
been supplied by them appeared to them the only available
documents but they couldn’t say for sure whether any more
documents existed or not. For their part, they had given all the
documents that were available with them. They also agreed to
provide to the Authority, a copy of SOMO Summary Report and
Ledger or Surcharge Collection (referred to above) for the use of the
Authority in its inquiry.
16
The Underlying Financiers, mentioned in Table IV of the Report,
were tracked with the help of L/C numbers which were available
with the UN Bank data. It consisted of 70% of oil transactions.
The IIC had the records of the Jordan National Bank to establish
that surcharges had, as a matter of fact, been paid under contract
No. M/9/54 and M/10/57.
The members of IIC offered any other information which may be
necessary for the inquiry being conducted by the Authority. They
stated that as of date, 25 countries and 60 jurisdictions had
initiated some action pursuant to the Volcker Report.
On 7th July, 2006, I had a meeting with Ms. Barcena Allicia, Chef de
Cabinet to the UN Secretary General at about 3:30 pm in the
United Nations Secretariat, UN Building. This was attended by Mr.
Edric Selous, Senior Attorney, UN Legal Division. I discussed the
problem of authentication of documents. I was told that
authentication of documents was an on going problem given the
political events of Iraq. I was told that the documents that had been
17
provided by the IIC had been provided under the seal of the UN and
as such they were authentic.
With that my visit to New York concluded. I boarded the flight for
India on 8th July 2006 at 8:10 pm and arrived in India on the
morning of 10th July 2006.
(Siddhartha Dave)
Counsel
Justice R.S. Pathak Inquiry Authority
18

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REPORT OF

THE JUSTICE R.S. PATHAK INQUIRY

THE INDEPENDENT INQUIRY COMMITTEE REPORT

THE UNITED NATIONS OIL - FOR - FOOD PROGRAMME

CONTRACT NO. M/09/54 AND CONTRACT NO. M/10/57

JUSTICE R.S. PATHAK INQUIRY AUTHORITY

1.0 The sanctions imposed by the United Nations against Iraq

Beneficiary: Singh, Mr. K. Natwar

Beneficiary: India-Congress Party

Surcharge Payments Associated with a Contracting Company

Depositor Date Embassy Depositor Date

3.1 The Government of India decided to create an Inquiry Authority

1. To inquire into the sources of information, materials and

4. Jurisdiction and Powers of the Inquiry Authority

4.4 Summarising the total impact of the aforesaid considerations,

Mr. Parag Tripathi, Senior Advocate.

Mr. Pragyan Sharma, Advocate, Supreme Court of India;

Of these legal consultants, Mr. Raju Ramachandran was appointed

6.1 When my consent was sought by the Government to accept

On December 8, 2005 the Inquiry Authority wrote to the Director of

6.3 To secure the permission of the Independent Inquiry Committee

6.4 On January 3, 2006 the Directorate of Enforcement wrote to

6.5 Then, in January, 2006, another collection of documents were

6.7 On May 3, 2006 the Inquiry Authority again requested the

7.1 At this point, it may be mentioned that a general notice was

7.2 Therefore, individual notices were issued to a number of

8. Meeting of Inquiry Authority deputation with the Chairman,

8.1 After recording the oral statements, it was considered

Shri Andaleeb Sehgal on July 17, 2006

EVENTS PRIOR TO JANUARY, 2001

9.4 In the year 1996-97, Shri Andaleeb Sehgal, a Delhi based

9.5 Reference is made to INDRUS here because, as would be seen

9.6 Shri Aditya Khanna deposed that INDRUS managed to do

9.10 Shri Andaleeb Sehgal was introduced to Shri Jamil Saidi by

9.13 After the meeting of October/November 2000 at New Delhi,

9.14 George Curmi introduced Shri Aditya Khanna to a

THE EVENTS UNTIL JANUARY 18, 2001

10.2 Therefore, when in the month of January, 2001 Shri

10.3 The delegation of the Indian National Congress Party was to

10.4 The original composition of the delegation and even the

10.5 The visit of the Congress delegation to Iraq was coordinated

10.6 However, the Counsellor wrote on January 17, 2001 to the

10.8 It is important to note that Shri Jamil Saidi in his deposition

10.10 However, the Inquiry Authority called Shri Randeep Singh

10.11 Shri Jagat Singh subsequently filed before the Inquiry

“……………We also look forward to the day that sanctions against

10.12 The delegation of the Congress Party traveled from New

11.1 The Ambassador of India to Amman at that point of time was

11.2 The official Congress Delegation took a flight to Baghdad on

11.3 Of these six persons who were examined by the Inquiry

January 30, 2001

I greatly valued our discussions on Indo-Iraq relations and wider

We have returned full of admiration for your stouthearted people.

H.E. Dr. Amer Mohammed Rasheed,

When confronted with the aforementioned letter he admitted that

The Inquiry Authority is of opinion that the aforementioned letter

Accordingly, the Inquiry Authority is satisfied both as to the

11.9 During the stay of the Indian delegation at Baghdad, the

11.10 Upon its return from Baghdad, the Indian Ambassador at

1. An authorization letter from the Leader of the Indian delegation

12.2 During his deposition before the Inquiry Authority, Shri

12.5 Almost simultaneously, Nicholas (Nick) Swan representing

“……….I refer to the recent visit to your offices and your

A copy of this letter was marked to Shri Andaleeb Sehgal, Delhi.