Singapore Technologies denies CAG report

The matter of the blacklisting of Singapore Technologies by the Indian Ministry of Defense just gets curiouser and curiouser. The arms company has contradicted the basis of the report, tabled by the Comptroller and Auditor General (CAG) of India in Parliament, on the special audit it conducted at the request of the Ministry of Defense, into the facts and circumstances that gave rise to the corruption case against the former Director General of Ordnance Factories and Chairman of the Ordnance Factory Board (OFB), Sudipta Ghosh.

The arms company had been recommended for blacklisting by the Central Bureau of Investigation (CBI) in June last year, after Sudipta Ghosh was implicated in a corruption case. A decision to blacklist was held in abeyance last December to allow trials of artillery howitzers and other weapons systems to be conducted, subject to the investigations agency’s final report.

But in January the company claimed this was not the case and that it had not, in fact, been blacklisted.

Last month, Defense Minister AK Antony confirmed to Parliament that the CBI had recommended the blacklisting of Singapore Technologies, a decision that was under consideration. Ritu Sarin of the Indian Express reported last Friday the Central Vigilance Commission (CVC) had given its opinion saying any action against tainted firms should be in accordance with the Defense Procurement Procedure 2008, thereby leaving the decision to the Ministry of Defense.

The same day, the CAG presented its special audit report to Parliament.

The overarching theme of the report was the absence of the contemplation of ‘even the rudimentary terms and conditions of TOT (Transfer of Technology) and co-production arrangements’ between the OFB and Singapore Technologies regarding the supply of SAR 21 MMS Close Quarter Battle Carbines to paramilitary and police forces under the Ministry of Home Affairs (MHA), India’s law enforcement and interior ministry, to which the OFB had committed, representing a partnership with Singapore Technologies, without apparent prior sanction from the Ministry of Defense.

The CAG report says, “Chairman / OFB stated that the subject matter can be taken up with MHA stating that ‘an offset agreement has been signed between OFB and STK and the latter has developed the carbine using Indian components so that the indigenization process becomes faster for supply to MHA’,” further stating that no such agreement had been concluded.

Brigadier General Patrick Choy, Executive Vice President of International Marketing at Singapore Technologies, says such an agreement on offsets was indeed signed and included a workshare arrangement as well, with production set out in phases, with more than 50 per cent of the weapon order being produced by the OFB. Choy showed your correspondent a copy of the document, a Memorandum of Understanding between OFB and Singapore Technologies dated 30 April, 2008, which he said was the agreement in question.

While Choy did not allow detailed study of the document, citing conditions requiring non-disclosure of the agreement, your correspondent noted that the memorandum was signed on behalf of the OFB by a Deputy Director General-level officer and witnessed by a Director-level officer.

If this is the case, questions can be raised as to how the CAG has omitted any reference to the memorandum in its audit report.

Choy also elaborated on other details mentioned in the CAG report. The report says Singapore Technologies was asked to supply six carbines, including five for the tests, but indicates only two weapons were provided by the company. This, the CAG says, was too small a sample for testing the weapon. The retired Singapore Army officer says the company did in fact supply five weapons for the trials, which were all tested at the National Security Guards (NSG) base at Manesar. He also says his company had no idea they would be competing with the OFB-developed AMOGH carbine at Manesar and had been given to understand their SAR 21 MMS was the only weapon the OFB was pitching to the MHA.

Choy also believes the CBI recommendation is not the reason for the cancellation of the 155mm Towed Artillery Howitzer tender, scrapped last month. “We are still in other programs,” he points out, listing their offers for the Light Strike Vehicle, where they’re pitching their Spyder vehicle, a Light Specialty Vehicle, assault weapons and an All Terrain Vehicle.

He says they only discovered the artillery field trials at Pokhran had been canceled when the Indian Army evaluation team ‘went home’. He says their iFH 2000 Towed Howitzer was being calibrated to fire Indian ammunition, for which they also had to qualify the pairing for safety purposes and certify it. “We had asked for range time of three weeks or more,” he says, as well as Indian ammunition for this purpose.

They were granted ten days at the range in the days of the last week of May and the first week of June, he says, also adding the trials kept getting interrupted due to floods, sandstorms and because the range was being used by others, leaving them with five effective days for trials, in which they ‘couldn’t finish everything’.

Choy asks for a ‘level playing field’ considering the other howitzer in contention, the BAE Systems’ FH77 B05, an advanced version of the old Bofors gun, the FH77 B02 has got opportunities to fire Indian ammunition many times before. “If I don’t have a level playing field then the competition seems to be not really fair,” he says, also saying that while India was a ‘buyer’s market’, ‘other firms may be discouraged’ because of the ‘high risk’ of trying to do business here. Right now, they have to decide what to do with their gun, which is still at Pokhran.