The US-based agro products giant ADM (Archer Daniels Midland) is facing investigations in India on charges of manipulating the investment norms laid out by Foreign Investment Promotion Board (FIPB) of the ministry of finance.The Economic Offences Wing (EOW) of Delhi Police has alleged that ADM, through its Mauritius-based subsidiary ADM Interoceanic Ltd, had wrongfully procured FIPB approval for further investments in India and to carry out agro-based businesses through another company ADM Agro Industries.
“It has been found that the requisite approval from FIPB was wrongfully procured by the alleged foreign company without requisite no-objection certificate from its joint venture partner Tinna Finex Ltd,” EOW said in its March 25, 2011 status report to the Delhi high court.
ADM operates in India through a joint venture company Tinna Oils & Chemicals Ltd, where ADM Interoceanic holds 75% stake and Delhi-based Tinna Finex Ltd holds the remaining 25% stake. As per existing investment rules ADM had to obtain a no-objection certificate from its JV partner Tinna Finex before seeking FIPB nod as nature of businesses proposed to be carried out by ADM Agro Industries were similar to Tinna Oils & Chemicals.
Tinna Oils deals in the business of seeds purchase, edible oil extraction, production, storage and sale of de-oiled cakes, among others.
A detailed e-mail sent out to ADM did not elicit any response.
The EOW said ADM Interoceanic fabricated the minutes of board meeting of Tinna Oils and Chemicals and duped the FIPB. The EOW registered a case against two directors of Tinna Oils, who are nominees of ADM, and alleged that the accused cheated not only the minority shareholders, but also Foreign Investment Promotion Board (FIPB).
The Illinois headquartered ADM reported net revenues of $61.7 billion for 2010.