Business Ethics and Corporate Governance, Second Edition

MINI CASE 1: XEROXING CORRUPTION

Xerox Modi Limited (XML) which is the Indian branch of Xerox reported that in the years 1998 and 1999 it manipulated its books to make fictitious payments which were recorded as commissions or discounts. According to the US-based parent company’s own admission, Xerox India paid over US$ 600,000 as bribes to various government employees to win contracts, though it was a serious criminal offence for an American company under the Foreign Corrupt Practices Act (FCPA) to pay bribes in a foreign country to obtain contracts. When these bribes were paid between 1998 and 1999, Xerox India was being controlled by the B.K. Modi group that owned a majority of shares in the joint venture. The fraud came to the limelight after ...