MoD blacklists 7 defense vendors

The Indian Ministry of Defense has blacklisted seven defense companies for alleged involvement in the deals tainted by corruption discovered with the arrest of the former Director General of Ordinance Factories, Sudipta Ghosh. All acquisition cases and projects in the pipeline with the seven companies have been ‘put on hold’ until further orders. This means that there will be ‘no institution of projects’ and no sourcing of supplies from these companies. The ministry has asked for a list of products and services supplied by the seven companies from the Ordnance Factories Board. Alternative suppliers are being found in case any of these companies are found to be supplying ‘critical components.’

These companies are:

Israel Military Industries (IMI), Israel
Singapore Technologies, Singapore
Media Architecture Pte. Ltd., Singapore
BVT, Poland
HYT Engineering, India
TS Kishan and Company, New Delhi, India
RK Machine Tools, India

Singapore Technologies was in the running for US $ 650 million 155 mm towed artillery guns to be supplied to the Indian Army, for which field trials were said to be underway. A subsidiary of Singapore Technologies, Singapore Technologies Kinetics was bidding to 145 units to the army. Now, one senior officer says, “They’ll be out of the field trails.”

While BVT, Poland is a marine engineering and naval architecture, Media Architecture supplies video solutions based on products like Avid. Israel Military Industries was contracted at the end of March by the OFB to build five artillery munition factories in the Indian state of Bihar at a cost of $ 240 million, over a three-year period. The factories were also to have produced shells for Bofors artillery guns. This deal had raised eyebrows because it had been signed without any requirement imposed on the contractor to ‘offset’ 30 per cent of the value of the deal to Indian firms.

Of the Indian firms, T S Kishan and Company supplies parts for Indian Army tanks like the Arjuns, T-90s and T-72s as well as the BMP-II. HYT Engineering of Pune supplies parts fro missiles and Ludhiana-based R K Machine Tools supplied parts to Bharat Earth Movers Ltd.

While the CBI filed the First Information Report (FIR) only on the 17th of last month, the ministry appears confident in acting in this matter even before a chargesheet has been filed because of the compelling evidence they have already amassed against Sudipta Ghosh. Since he has been charged with offenses related to ‘conspiracy’ under the Indian Penal Code, the companies implicated for corruption would also be liable to face legal action for criminal offenses.

Ghosh had reportedly created a bank account in Singapore, which used to conduct these transactions. The transactions have now been traced by the CBI and form the basis of the evidence against him and the seven firms listed above. According to some reports, he started receiving substantial amounts only after he retired on May 1 this year.