Government bans seven tainted arms firms

 The ministry of defence (MoD) on Friday imposed an outright ban on dealings with seven major defence companies, including Israeli Military Industries (IMI) and Singapore Technologies, even as the Central Bureau of Investigation (CBI) investigates a widespread corruption racket involving the former chief of the Ordnance Factory Board and several others.

A senior MoD official said the blacklisted companies are: Israeli Military Industries, Israel; Singapore Technologies, Singapore; HYT Engg, TS Kishan & Co Pvt Ltd, New Delhi; RK Machine Tools; BVT, Poland; and Media Architects Pvt Ltd, Singapore.
“Though no charge-sheet has yet been filed by the CBI, evidence such as transfer of money to personal accounts has been detected,” a senior MoD official said.  

The official said the government views both receiving and giving bribes as an offence and as such there cannot be any lenient view on this account. “The matter will be further reviewed as and when the CBI provides more evidence,” the official said. He added that the MoD desires to tackle issues of corruption in procurement cases “head-on”.

At the centre of it all is Sudhir Choudhrie, a London-based arms dealer who also swung the Rs 10,000 crore medium-range surface to air missiles (MRSAM) deal with Israeli Aerospace Industries (IAI) just before the general elections. The MRSAM deal was awarded without competitive bidding and included an unusual 6% business charge, DNA investigations have shown. CBI sources and DNA investigations show that the MRSAM deal and the ordnance factory contracts were swung by Choudhrie’s India-based operatives, who are alleged to have paid off senior officials, politicians and military officers.

With the DNA expose on the MRSAM deal already generating a lot of political controversy, defence minister AK Antony has ordered all dealings with the seven companies to be “put on hold” until further orders.

These seven companies figure in the ongoing investigations by the CBI into the alleged racket of former ordnance chief Sudipto Ghosh, Delhi-based Air India official Ramesh Nambiar, and several others.

Antony’s decision will be a severe setback to the construction of a massive ordnance factory complex in Nalanda, awarded to IMI. It will also adversely affect several other military projects. While it sends out a strong signal against corruption, it raises serious questions about why the government has not blacklisted companies such as IAI and Rafael of Israel despite them being named in CBI’s FIRs.