upon the instructions of Shri Sehgal to the Account No.

500320/02 with the Jordan National Bank,

which belonged to theSOMO officials to whom surcharges were paid.16.18 Masefield issued a
payment authorization datedDecember 5, 2001 ordering that an amount of USD 240,268.80 be paid
into the bank account of Hamdaan Exports Limited in theJordan National Bank, Cyprus, in Account
No. 12367. Theamount of USD 240,241.80 was received into the account of Hamdaan Exports
Limited on December 10, 2001. Of thisamount, an amount of USD 190,224.00 was to be paid to
thecredit 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 190,450including
commission was debited from the account of HamdaanExports Limited and the amount was
transferred to the Account No. 500320/02.16.19 For the balance amount of about USD 50,000 Shri
Sehgalwrote to the Manager, Jordan National Bank, Cyprus, asking himto debit a sum of USD 49,500
and transfer it to the account inBarclays Bank PLC, Jersey, Channel Islands. It was to becredited to
the account of INDRUS Trading Company Limited inthe Account No. 734279666. The Jordan National
Bank, Cyprus,transferred the said amount to the account of INDRUS TradingCompany Limited. The
amount of USD 49,461.24 was receivedin the accounts of INDRUS on December 14, 2001. Of this85

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 theContract No. M/10/57, an amount of USD 250,032 was paid assurcharges.
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 AndaleebSehgal received a total
sum of USD 146,000 which amounts toabout 5 cents per barrel of oil. The entire amount was
receivedin the bank account of INDRUS Trading Company Limitedlocated in Jersey, Channel Islands.
This was to be distributed inthe ratio of 4:1 between Shri Andaleeb Sehgal and Shri AdityaKhanna.As
stated above, out of USD 146,000 an amount totaling USD68,293 was received in the accounts of
Hamdaan Exports andSehgal Consultants in India. For his share, Shri Aditya Khannareceived 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 considerableassistance, willing
cooperation and indefatigable industrycontributed by all involved in the conduct and completion of
theInquiry. Senior counsel have given freely of their precious time86

and expertise and provided invaluable guidance at every stage.Junior counsel have risen to their
responsibilities and unsparinglyworked throughout the term of the Inquiry Authority providing
auseful collation of materials. In particular, the Inquiry Authorityis specially thankful to the Senior
Counsel and the Legal Counselespecially appointed to the Inquiry Authority. By their
intimateknowledge of the case as it unfolded and their deft handling of the oral examination
statements of persons appearing before theInquiry Authority they succeeded in marshalling and
puttingtogether an invaluable volume of oral evidence. The InquiryAuthority recognizes the
dedicated effort, which was constantlyin evidence, of its Secretary, Director and the Under Secretary
of keeping the proceedings in good order at all times, drawing fromthe wisdom of long experience
and providing soundadministrative advice. Finally, the Inquiry Authority records itsdeep appreciation
of the sincere devotion and discretion of itsPersonal 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
documents
received from
the Ministry of
External
Affairs,Govern
ment of India,
New Delhi. Be
sides the afores
aiddocumentar
y material, the
Inquiry
Authority
referred to
materialappear
ing in
affidavits filed
by a large
number of
persons
whoappear to
have been
associated
directly or
indirectly with
themaking of
the two
contracts under
inquiry. The
detailed
analysismade
by the Inquiry
Authority to all
such material
gives rise tothe
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
ininfluencing
and facilitating
the
procurement of
the Contracts
hadfructified.
There is
no material
to show
that Shri
Natwar Singhd
erived any
financial or
other personal
benefit from
thecontracts. A
s regards
the Indian
Congress
Party, it has
beenshown as
a non-
contractual
beneficiary
with respect to
Contract No.
M/10/57. The
Inquiry Author
ity has found
no evidence
thatthe
Congress Party
was involved
in the Contract
and that
itderived
any benefit
at all from the
Contract. Indee
d, there
isnothing to
show that the
Indian
Congress Party
had anything
todo with
the Contracts
M/09/54 and
M/10/57. Appa
rently, it
has been
shown as
a non-
contractual
beneficiary
because that
was
theimpression
created in the
minds of the
Iraqi
authorities by
reasonof the
conduct of Shri
Natwar Singh
and Shri Jagat
Singh
and thedocume
nts which they
employed
including the
letters written
byShri Natwar
Singh to the
Iraqi Oil
Minister.16.9
Consequently,
the reference
to Shri Natwar
Singh
withrespect to
Contract No.
M/09/54 is just
ified in the sen
se81
explained
earlier, while
the reference
to the Indian
CongressParty
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,ag
ency, 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 foun
d that under C
ontract No. M/
09/54, an amo
untof USD
61,969 was
transferred by
a SWIFT
MESSAGE
fromChase
Manhattan Ban
k, New York,
USA, in
March 2001. T
hesaid transfer
was made on
the instructions
of BNP
Paribas,
Paris,the orderi
ng customer be
ing Masefield
AG, London. T
heamount was
transferred to
Account No.
12349 with the
Jordan Nationa
l Bank,
Cyprus, held
by
Shri Andaleeb
Sehgal.16.12
Of this amount
in the account
of Shri Sehgal
in the
Jordan Nationa
l Bank,
Cyprus, an
amount of
USD 60,000
was
deductedand
transferred to
the Jordan
National Bank,
Amman, to
thecredit of
Account No.
500320/02. Th
e Account
Number
referredlast
was in the
name of
Saddam Z.
Hassan and
Ibrahim
AliShaiyeb
of SOMO. Thi
s was also
done in
March 2001.82

16.13 A furthe
r amount was r
eceived by Shr
i Sehgal into th
eaccount 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
AGthrough
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. Thu
s the total
amount of
surcharge paid
to
the officialsof
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
monieswere:
Shri Aditya
Khanna, Shri
Andaleeb
Sehgal,
SehgalConsult
ants and
Hamdaan
Exports.16.15
The money,
a sum of
USD 96,785.9
9
was transferred
byMasefield
AG into the
account of
INDRUS on
June 6,
2001.The said
money was
paid into the
account of
INDRUS
TradingCompa
ny Limited,
Jersey in its
account with
Barclays
Bank PLC,
13, Library
Place,
Jersey in
Account No.
73427968. Of t
his amount, an
amount of
USD 7,000
was paid to
SehgalConsult
ants on June
11, 2001 at the
bank account
in India. Afurt
her sum of
USD 89,000
was transferred
to a company
by thename of
Coburg
Associate, the
details of
which are not
availablewith
the Inquiry
Authority. Ho
wever, 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 Sehgal83
Consultants to
which the
transfer was
made in the
first instance
islocated in the
Standard
Chartered
Grindlays
Bank,
Greater Kailas
h, Part-I and
the Account
Number is
26329887. The
details of the
Bank Account
of Hamdaan
Exports to
which
atransfer of
USD 40,000
was made by
Coburg
Associate
SAthrough
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
HamdaanExpo
rts as the
commission
payable to it
for the
execution of
theContract
M/09/54. This
amount, howev
er, does
not include
theamount
retained by
Shri Aditya
Khanna at 1
cent per barrel
of oilas his
commission in
the account of
INDRUS, to
which
headmitted.On
August 9,
2001, an
amount of
USD 3793.52
was
receivedinto
the account of
Hamdaan
Exports with
State Bank of
India, New
Delhi. This
amount had
been transferre
d from Coburg
SAto Hamdaan
Exports.16.16
As
regards Contra
ct No.
M/10/57, it
may
be mentioned
asfollows:16.1
7 Payment was
made by Mase
field into the a
ccount of Ham
daan Exports
for Contract
M/09/120. Ho
wever, it
appearsthat
no further pay
ments were
made
under this
Contract. Ana
mount of USD
59,973 was
received into
the account
of Hamdaan
Exports
Limited
bearing No.
12367 with the
Jordan Nationa
l
Bank, Cyprus.
This amount
was further tra
nsferred84

upon the
instructions of
Shri Sehgal to
the Account
No.500320/02
with the Jordan
National Bank,
which
belonged to
theSOMO
officials to
whom
surcharges
were
paid.16.18 Ma
sefield issued a
payment autho
rization dated
December 5,
2001 ordering
that an amount
of USD
240,268.80 be
paid into the
bank account
of Hamdaan
Exports
Limited in
theJordan Nati
onal Bank,
Cyprus, in
Account No.
12367. Theam
ount of USD
240,241.80
was received
into the
account
of Hamdaan E
xports Limited
on December 1
0, 2001. Of thi
samount, an
amount of
USD
190,224.00
was to be paid
to thecredit of
Account No.
500320/02 of
the Jordan
National
Bank and
reference was
made to Mrs.
Nawzat A. Al
Qudsi.Accordi
ngly, on
December 12,
2001, an
amount of
USD
190,450includi
ng commission
was debited
from the
account of
HamdaanExpo
rts Limited and
the amount
was transferred
to the
Account No.
500320/02.16.
19 For the
balance amoun
t of about USD
50,000 Shri
Sehgalwrote to
the Manager,
Jordan
National Bank,
Cyprus, asking
himto debit a
sum of USD
49,500 and
transfer it to
the account
inBarclays
Bank PLC,
Jersey, Channe
l Islands. It
was
to becredited
to the account
of INDRUS
Trading
Company
Limited inthe
Account No.
734279666. Th
e Jordan
National Bank,
Cyprus,transfe
rred the said
amount to the
account of
INDRUS
TradingCompa
ny
Limited. The
amount
of USD
49,461.24 was
receivedin the
accounts of IN
DRUS
on December 1
4, 2001. Of thi
s85