A senior United Nations official who allegedly used his influence to procure more than $ 50 million in U.N. contracts for an Indian American businessman in exchange for prime Manhattan real estate was yesterday arrested in New York.

Sanjaya Bahel, a former Indian official on deputation to the United Nations, was charged in an indictment unsealed in the U.S. District Court with accepting real estate as a reward for assisting Nishan Kohli in getting contracts. Mr Kohli was yesterday arrested in Miami. Mr Bahel, Chief of the Commodity Procurement Section of the U.N.'s Procurement Division until 2003, is the Chief of the Commercial Activities Service in the U.N. Postal Administration.

United Nations Secretary-General Kofi Annan's spokesman said Mr Bahel had been the subject of an internal fact-finding investigation into allegations of misconduct related to his procurement functions, conducted by the Organisation's Office of Internal

Oversight Services. "He was formally charged with misconduct by the organisation on 31 August, 2006, and was under suspension without pay since that time," said

Stephane Dujarric, U.N. spokesman. He said the United Nation provided its final report to the competent authorities of the USA and India.

The United States Attorney's Office for the Southern District of New York commenced its own investigation into the activities of Mr Bahel. Mr Dujarric said the United Nations had been fully cooperating with the Office of the United States Attorney during the course of its investigation.

Mr Annan yesterday received a request from the U.S. authorities to waive Mr Bahel's immunity from legal process. "The Secretary-General confirms that he has waived Mr Bahel's immunity," Mr Dujarric said.

Mr Kohli represented companies, including Thunderbird Industries and Telecommunications Consultants India Ltd. (TICL), an enterprise owned by the Indian Government. The indictment claims the scheme began around 2000.

"Bahel granted exceptional access to Mr Kohli, providing him with a line of communication and source for information within the United Nation that exceeded what U.N. vendors could typically expect to receive," said a statement issued by the U.S. Attorney's Office for the Southern District of New York. "In addition, Mr Bahel was a vocal advocate within the U.N. for the companies represented by Mr Kohli. On occasion, Mr Bahel even canceled bids by competing companies and re-bid contracts in order to give a competitive advantage to Mr Kohli's business interests."

Mr Bahel also helped Mr Kohli when problems arose regarding contracts, the indictment charged. It alleges that in 2003, Mr Kohli bought a mid-town Manhattan apartment and provided it to Mr Bahel and his family for two years. "During that time, Mr Bahel paid a greatly-reduced monthly rent, and no rent at all for certain months." Mr Kohli sold the apartment to Mr Bahel in May 2005, prosecutors said, at a purchase price that was so low the Condominium Board of the building considered blocking the sale.

If convicted, Mr Bahel and Mr Kohli could face a maximum of 10 years in prison.