What could Indian and Singapore Defense Industry Talk About?

Earlier this month in Singapore, the Indian Defense Minister Manohar Parrikar and Singapore Defense Minister Dr. Ng Eng Hen issued a joint statement on the occasion of the Shangri La Dialogue 2016 organized by the International Institute for Strategic Studies (IISS) which observed among other things that ‘Singapore and India also convened the first Defense Industry Working Group in May 2016’. 

While precious little is known about this working group so far, an observant reader could be forgiven for discovering absurdity in the meeting. The reason for this is the absence of of Singapore’s primary defense company from the meeting because it happens to be disbarred from the defense business in India. 

Blacklisted

Singapore Technologies was blacklisted in India in June 2009 by the defense ministry of A.K. Antony under the previous government. Singapore Technologies is a USD 10 billion company owned by Temasek Holdings, the investment arm of the Government of Singapore. It’s business units include ST Kinetics, ST Aerospace, ST Marine, ST Electronics and ST Dynamics. It had been in the running to supply assault rifles and artillery to India before it was blacklisted.  

The Case

The CBI arrested Sudipta Ghosh, former Chairman and Director General of Ordnance Factories Board (OFB), in May 2009 for allegedly demanding and accepting illegal gratification from foreign companies, including ST Kinetics.

It was in June 2010 that the CBI told the press that they had filed charges against Gupta. The situation continued to meander for a while till ST Kinetics decided to move the Delhi High Court to get a sense of where they stood – in fact, to find out what they were charged with in the first place. Before that, ST Kinetics had gone to town holding press conferences asking the government to state what their crime was and offering to provide access to all documents. Surprisingly, it appears that at no point of time was that offer taken up.

In Court

Moving the court in March 2011, ST Kinetics got an order that asked the government that “Counter-affidavit be filed taking definite stand as to what is the status of the petitioner in the eyes of the respondents pertaining to procurement of 400 units of 155mm/52 Calibre Towed Guns, 155mm/39 Calibre Ultra Light Howitzer Guns and quantity 43,318 Close Quarter Carbine (CQB) with day and night sights and quantity 3,33,11,500 rounds of ammunition with transfer of technology (TOT).”  In good old Bollywood fashion, ST Kinetics went from tareekh pe tareekh, tareekh pe tareekh with nary a counter-affidavit from the government.

When it did come up with a response, it was to say that the company would be blacklisted. That notification – without any charges filed against ST Kinetics – was issued in March 3, 2012 – a whole year later. In effect, by going to court and forcing the government’s hand, the companies had managed to get themselves a formal blacklisting order without even being charged with a crime.

Any bilateral defense industry forum would be meaningless without the active attendance of the Singapore government-owned company, which would likely require a reassessment of the status of the company in India. 

Corruption in defense acquisition is a politically charged issue in India and New Delhi witnessed a political furor recently when an Italian appeals court reversed the decision of a lower court which had concluded that there was no evidence of corruption in the sale by the Italian Finmeccanica-owned AgustaWestland of 12 AW101 VVIP helicopters.

The issue is being appealed further in Italy and the Indian government reaction to another possible reversal of the judgment is anybody’s guess.

Finmeccanica had proposed a change of name to Leonardo, recently, and AgustaWestland is now part of Leonardo’s Helicopter Division.