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Antony freeze on Israel firm

Sunday, June 07, 2009, The Telegraph

 

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New Delhi: Defence minister A.K. Antony today froze all business with a major Israeli military firm and six other companies alleged to have bribed the former Ordnance Factories’ chief, Sudipta Ghosh, who was arrested in Calcutta last month.

 

Among the six other companies are Singapore Technologies, which is competing for a huge Indian Army artillery modernisation programme worth a billion dollars, and could now be out of the race leaving the field open to the only other vendor, Bae Land Systems, which is the owner of the former Bofors company.

 

The five other companies are: BVT of Poland, Media Architects Pte Ltd of Singapore, T.S. Kishan and Company Pvt Ltd, R.K. Machine Tools, and HYT Engineering — the last three being Indian firms.

 

“The minister has decided to take a tough stand against corruption and send out a signal. All acquisition cases in the pipeline of these seven companies that figure in the CBI first information report against the former director-general of the Ordnance Factory Board have been put on hold forthwith,” said the defence ministry spokesperson, Sitanshu Kar.

 

The action against the companies has been taken despite the CBI not yet having filed a chargesheet because the ministry was convinced by the evidence that there were transfers of large sums in the personal account of Ghosh.

 

A defence ministry source said information had been received that Ghosh held an account in Singapore to which funds were transferred from these companies.

 

Israel Military Industries (IMI) was contracted in March this year — a month before Ghosh retired in April — to partner the Ordnance Factory in Nalanda for a Rs 1,200-crore project to make bimodular propellant charges — ammunition for the Indian Army’s Bofors guns.

 

It is also in a joint venture with the ordnance factory in Khamaria in Madhya Pradesh to make “cargo ammunition”, cluster bombs designed to maim. IMI is also contracted by the ordnance board to export the ammunition.

 

Singapore Technologies, and a subsidiary, ST Kinetics, apart from participating in the competition for ultra-light Howitzers with its Pegasus gun, is also involved with ordnance factories in producing combat vehicles.

 

The defence ministry has sought details from the ordnance board on all projects in which the seven companies are involved to assess the impact the blacklisting could have.

 

In the past, Denel of South Africa was blacklisted after allegations that it paid bribes to win a contract from Indian forces to supply anti-materiel guns. Bofors and HDW of Germany were also blacklisted.

 

Blacklisting can often prove to be counter-productive for the armed forces as it can slow down their modernisation.

 

 

 

 

 

 

 

 

 

 

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