Saturday, October 29 2005 19:14 Hrs (IST) - World Time -

New Delhi: A UN inquiry report naming Congress Party and External Affairs Minister K Natwar Singh as beneficiaries of Iraq's oil for food programme during Saddam Hussain's regime triggered today (Oct 29, 2005) a major political controversy although both dismissed the charges as false.

Notwithstanding the denials, Bharatiya Janata Party (BJP) demanded the immediate resignation of Singh and asked Congress to come clean with full details of the alleged transactions.

The Volcker Committee, appointed by UN Secretary General Kofi Annan last year to investigate the administration and management of the 64 billion dollar programme had listed Singh and Congress party as 'non-contractual beneficiaries.'

The report alleged that some of over 125 Indian companies were given contracts under the programme by making illegal payments to the Saddam government. When contacted some of these companies like State Trading Corporation, Kirloskar Brothers and Ranbaxy denied having paid any kickbacks.

The maximum number of Indian companies involved in kickbacks are from tea industry which numbered more than 35.

Terming the charge against him as 'baseless and untrue', Singh, on his way back from Moscow, said in a statement from Frankfurt that he was 'shocked and outraged'.

Asserting that his 50 years in public life has been an open book, the minister said his personal integrity has never been questioned. He said he would meet Prime Minister Manmohan Singh and Congress President Sonia Gandhi on his return.

Dismissing the allegation, Congress said it had no direct or indirect connection with the matter. Party spokesman Anand Sharma said Congress has been 'unfairly and incorrectly' named in the report and legal experts were looking into the issue. BJP General Secretary Arun Jaitley at a press conference here said Singh should resign immediately and the government should probe the entire episode.

In all about 2,200 companies from 66 countries, including corporations in US, Franch, Germany and Russia, allegedly paid kickbacks to the tune of 1.8 billion dollars to get business contracts from the Saddam Government, the report released on Thursday had said.

The report said prominent politicians also made money from extensive manipulation of the programme in Iraq. It said two main types of manipulations surcharges paid for contracts from spare parts, trucks, medical equipment besides other supplies and kickbacks for oil contracts.

It said Iraq's political beneficiaries used little known intermediary companies to enter into oil contracts and oil was then sold to an established firm or trader who paid them a premium above the UN's designated price. The premium was, in turn, used to pay another entity designated to receive those funds.

The oil for food programme which continued from 1996 to 2003 enabled Iraq to sell oil provided most of the money went to buy humanitarian goods. It was launched to help ordinary Iraqis cope with UN sanctions imposed after Saddam Hussain's 1990 invasion of Kuwait.

Saddam, it is alleged, corrupted the programme by awarding contracts to and getting kickbacks from favored buyers.