Sweeping Away Sleaze On The Subcontinent

A slew of scandals could produce more accountability--which may lure global investors

In 1992 at an investment conference in Chicago, speaker K.L. Chugh, chairman of Indian Tobacco Co., was hailed by the crowd as an Indian hero and ITC as a much-admired Indian corporation. A U.S. magazine even named Chugh its International Manager of the Year in 1994. But on Oct. 31, his admirers were shocked: In a dramatic midnight swoop, investigators arrested Chugh and sent him to Calcutta's colonial-era Presidency Jail. He is awaiting trial, accused of siphoning off at least $100 million of ITC funds and stashing them in Swiss bank accounts over the last 10 years. Eleven others at ITC have also been charged.

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