Indian Military

The Indian government will soon decide on penal action against an Israeli defense company blacklisted in connection with a graft case filed by the Central Bureau of Investigation (CBI) against a former Ordnance Factory Board (OFB) chief, the Indian Upper House of Parliament, the Rajya Sabha was informed Wednesday.

The CBI filed the case against Sudipto Ghosh, former director general of OFB, in May 2009.

Defense Minister Arackaparambil Kurian Antony, in a written reply, said his ministry has issued show cause notices to Israel Military Industries (IMI) last year, following which the company requested supporting documents on the charges against it, which were provided to it.

“A decision regarding the penal action will be taken after examining the reply of IMI and in consultation with the ministry of law and justice and the Central Vigilance Commission,” Antony said.

After examining the First Information Report (FIR) lodged by the CBI against Ghosh, the defense ministry, through an order May 28, 2009, decided to put on hold all contracts with companies named by the investigating agency in the graft case.

British arms major BAE Systems Thursday opted out of India’s tender for 1,580 towed artillery guns with the deadline for submitting the bids coming to an end, a company official said here.

The tender was issued on January 28 under the Indian Army’s Rs.20,000 crore (Rs.200 billion/$ 444.8 million) artillery guns modernization program that has been hit by the taint surrounding the purchase of the Bofors guns 24 years ago.

The firm has the FH-77B05 155-mm 52 caliber towed gun among its products that it could have offered, but will now not do so after a detailed assessment of the tender documents, the official said.

BAE Systems, however, is on the verge of signing a Rs. 2,900 crore contract for 145 M-777 ultra-light howitzers. This gun is manufactured by the company in the US and the sale will be under the Foreign Military Sales route of the US government.

The tender for the towed guns seems jinxed, with the defence ministry cancelling the March 2008 tender in July 2010 and issuing a fresh request for information after BAE’s competitor Singapore Technologies Kinetics had sought more time for bringing its gun iFH-2000 for the trials in India, citing a single vendor situation emerging due to that development then.

NEW DELHI: The Central Bureau of Investigation is likely to ask Army chief Gen V K Singh for a formal complaint in connection with his allegation that he was offered a bribe of Rs 14 crore to clear a "sub-standard" defence deal.
According to agency sources, any action will be taken only after getting a formal complaint from Gen Singh. The CBI has asked the army chief to submit details about the date of meeting with the lobbyist and possible witness list along with the complaint, they added.
"Before a formal complaint is received from Singh, no case will be registered. As soon as we get a formal complaint, FIR will be registered in the case," said a CBI official.
The official informed that CBI has received a reference from the defence ministry to probe the matter and it has been processed according to the laid down procedure.
The army chief had claimed that an equipment lobbyist had offered him a bribe of Rs.14 crore in order to have a tranche of 600 sub-standard vehicles of a particular make cleared for purchase, a matter which he had reported to defence minister AK Antony.

The Comptroller and Auditor General (CAG) of India was asked by the Ministry of Defense, in June 2009, to conduct an audit into the facts and circumstances that gave rise to the criminal case against the former Director General of Ordnance Factories and Chairman of the Ordnance Factory Board (OFB), Sudipta Ghosh.

While submitting that the institution of the CAG was neither ‘empowered nor equipped’ to conduct inquiries of a forensic nature, the CAG nevertheless accepted the charge and submitted a report to Parliament last week, that testifies to the acts of omission and commission, based on incompetence, lack of foresight or mala fide intent, that led to the recommendation of a blacklist of companies.

The recommendation for blacklisting Singapore Technologies (ST) arose from the issue of the supply of Close Quarter Battle (CQB) Carbines to paramilitary forces under the Ministry of Home Affairs (MHA), India’s law enforcement and interior ministry.

ST was indirectly mentioned in the FIR (First Information Report) registered by the CBI (Central Bureau of Investigation) against Sudipta Ghosh and so the ‘transaction with STK was put on hold in June, 2009 by MOD.

The Indian Defense Minister AK Antony confirmed to Parliament on Tuesday, the recommendation of the Central Bureau of Investigation (CBI) for the blacklisting of six arms firms by the Ministry of Defense. Four of these firms, Singapore Technology (Singapore Technologies), Israeli Military Industries (Israel Military Industries), TS Kissan and Company Private Limited and RK Machine Tools Private Limited, are the subject of such a recommendation for the second time, after they were first blacklisted in June last year, along with three other firms, Media Architecture Private Limited of Singapore, BVT of Poland and HYT Engineering of India.

Two other firms, Rheinmetall Air Defence of Germany and a Russian firm called Cooperation Defence have also been recommended for blacklisting this time around.

All of these firms have been implicated in the corruption case involving the former Director General of Ordnance Factories and Chairman of the Ordnance Factory Board (OFB), Sudipta Ghosh, in May last year.

The Indian Army has issued a Request For Information (RFI) for towed artillery guns, effectively canceling the previous process for procurement of these weapons systems, in which BAE Systems was fielding the FH77 B05, (an upgraded version of the FH77 B02 in service with the army) against Singapore Technologies (ST) Kinetics’ iFH 2000.

The army, which had issued the RFI on Thursday, gave much cause for confusion, by initially alluding to ‘A Self Propelled Gun System mounted on a vehicle chassis such as CEASER 155 mm Self propelled Gun’. The line was deleted on Friday evening, to remove any doubts about the earlier tender process being canceled.

During the day, on Friday, sources in the Ministry of Defense confirmed that the RFI, indeed, indicated a fresh tender for 155 mm/52 caliber Towed Artillery Guns. The reason the ministry gave for this decision was the creation of a single-vendor situation due to the non-appearance of the ST Kinetics’ gun at the trials.