A US federal indictment has charged six individuals for their alleged involvement in the payment of bribes to Indian government officials in exchange for titanium mining licenses in the state of Andhra Pradesh.
The six individuals conspired to pay bribes amounting to $18.5m for a mining project that was expected to yield annual sales of $500m through titanium products.
Those indicted are two Ukrainian nationals, Dmitry Firtash and Suren Gevorgyan; Hungarian businessman Andras Knopp; an Indian national and permanent resident of the US Gajendra Lal; a Sri Lankan Periyasamy Sunderalingam and an Indian Member of Parliament KVP Ramachandra Rao, who is a former advisor to the chief minister of Andhra Pradesh.
A press release by the US Department of Justice states that: "All six defendants were charged with one count each of racketeering conspiracy and money laundering conspiracy, and two counts of interstate travel in aid of racketeering."
Five of the defendants, excluding Rao, are also charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA).
According to the documents filed by a US federal court, Swiss company Bothli Trade had signed a joint venture agreement with the Government of Andhra Pradesh in April 2006 to mine various minerals, including ilmenite which is used in titanium products.
Bothli Trade is indirectly controlled by Firtash through Group DF, an international conglomerate registered in the British Virgin Islands.
Ostchem Holding, another company under Group DF, had signed an agreement in February 2007 with Chicago-headquartered Company A, to work toward a further agreement that would allow Bothli Trade to supply five to 12 million pounds of titanium sponge annually to Company A.
Bribes were allegedly paid to state and central government officials in India to obtain the necessary approvals and license for the mining project.
The indictment said: "The defendants used US financial institutions to engage in the international transmission of millions of dollars, for the purpose of bribing Indian public officials to obtain approval of the necessary licenses for the project."
"They allegedly financed the project and transferred and concealed bribe payments through Group DF, and used threats and intimidation to advance the interests of the enterprise's illegal activities."
Firtash and Knopp are charged with negotiating with the Indian officials; Gevorgyan and Lal are charged with signing false documents and monitoring bribe payments and transfers; Rao is alleged to have solicited bribes for himself and others while Sunderalingam met with Rao to determine the total amount of bribes and identify various foreign bank accounts to which the money could be transferred.
As many as 57 transfers of funds are alleged to have taken place among various entities, some controlled by Group DF, in various amounts totaling more than $10.59m between April 2006, and July 2010.
The indictment seeks forfeitures of Firtash's interests in Group DF and more than $10.59m from all six defendants.
The case is being investigated by the FBI's Chicago Field Office.
Image: The mining project in Andhra Pradesh was expected to yield annual sales of $500m through titanium products. Photo: courtesy of Alchemist-hp (pse-mendelejew.de).