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Carbide offered $500m wanting right audit

world Updated: Jul 03, 2010 00:12 IST
Anirudh Bhattacharyya
Anirudh Bhattacharyya
Hindustan Times
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Union Carbide and its then chairman Warren Anderson may have offered compensation higher than what was finally agreed on for the Bhopal gas disaster, but that initial offer was rejected by India because Carbide had sought oversight over the compensation process through an audit firm.

According to some who were involved in the process, a secondary channel for negotiations had been established in 1985 between Anderson and India.

At the time, Carbide had liability insurance worth $ 100 million but there was willingness to take an additional $400 million from the company’s shareholder equity.

But, Anderson sought monitoring of the payment process through a firm of auditors like Arthur Andersen, which is now defunct. This offer was rejected by Indian authorities, sources said. The final settlement arrived at $ 470 million.

Ravi Batra, part of the negotiations then, was a member of National Advisory Council on South Asian Affairs. Batra who met and had telephonic conversations with Anderson during the period said, “He was dedicated to maximizing relief to the victims ….He offered $400 million of stockholder equity in addition to $100 of insurance proceeds…I was sad to learn that ... what he was offering was not acceptable to various constituencies on the claimants’ side.”

The offer had been conveyed to Indian authorities including a cabinet minister during a meeting at the South Portico in Washington. But the breaking point appeared to be India’s reluctance to accept any manner of foreign oversight.