TWENTY months after the Enforcement Directorate (ED) stunned corporate India by charging tobacco giant ITC with the biggest FERA violation ($100 million) in Indian history, the story's taken another interesting turn. Last fortnight, a US court ruled in favour of ITC against the company's erstwhile business partners—and now sworn enemies—the US-based Chitalia family. The court supported ITC's claim for recovery of $12 million from the Chitalias, and dismissed the Chitalias' counterclaim of $14 million against ITC.
The FERA case revolves around ITC's dealings with the Chitalias, and the ED's main witnesses against ITC are this father-son team of Suresh and Dewang, who have turned approvers. "The US court's judgement may weaken the ED's case," says a leading lawyer unconnected with the case. Spirits have soared at Virginia House, ITC's headquarters, after the US judgement, but
the company's spokespersons remain tight-lipped regarding the implications on the ED case.
The Chitalias first linked up with ITC as...