India to probe foreign minister over claims he received favors from Saddam

The Indian government will investigate allegations that its foreign minister benefited illegally from the U.N. oil-for-food program in Iraq, a newspaper reported Monday, as the minister rejected demands for his resignation.

The government will announce Monday the appointment of a retired Supreme Court judge to investigate the allegations against Foreign Minister K. Natwar Singh, the Times of India reported, quoting unnamed sources.

Prime Minister Manmohan Singh's office declined to comment on the report.

The newspaper said the investigation would seek to establish the veracity of the claims, made in a U.N. report which accused more than 2,200 companies and prominent politicians worldwide of colluding with Saddam Hussein's regime to bilk the humanitarian oil-for-food program of US$1.8 billion (-1.5 billion) in kickbacks and illicit surcharges.

Singh and the governing Congress party were named as a "non-contractual beneficiary" in the report by the Independent Inquiry Committee, led by former U.S. Federal Reserve Chairman Paul Volcker.

Singh has repeatedly denied involvement in the scheme, calling the allegations "baseless and untrue," and rejected the opposition Bharatiya Janata Party's demands that he step down.

"I will fight and fight back," Singh told the NDTV channel Saturday. "The BJP is not going to decide who the foreign minister of India is going to be."

He has also challenged Volcker's claim that the committee sent notices to all those named in the report so they could clarify their involvement.

"Neither the Congress (party) nor I ever received any communication," he told The Hindu newspaper in an interview published Sunday.

"Mr. Volcker said everyone had been contacted, but he also said he only just found out that I was the foreign minister of India," he said. "If he didn't know who I was, to whom did he send a notice?"

Singh could not be reached for comment.

The oil-for-food program allowed Iraq to sell limited and then unlimited quantities of oil, as long as most of the money was used to buy humanitarian goods to help ordinary Iraqis cope with U.N. sanctions. Saddam's government chose all the oil buyers and goods suppliers.

The report said countries that opposed U.N. sanctions imposed on Iraq after its 1990 invasion of Kuwait were given priority, AP reported. V.A.