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CONTROVERSY SURROUDING

CONTROVERSY SURROUDING U.K DEFENCE COMPANY THREATENS TO ESCALATE
By Bulbul Singh

10 Apr 12. UK-based Vectra Group is now in the eye of the storm brewing around allegations of bribery levelled by India’s Army Chief, General V.K. Singh. The controversy is about the repeat orders given to India’s state-owned Bharat Earth Movers Limited, (BEML) which has been receiving orders on nomination basis since 1986 to supply Tatra trucks purchased from Tatra Vectra Motors Ltd with whom BEML has an agreement.

Ravi Rishi, the UK-based Non-Resident Indian with British passport, the majority owner of Vectra Group is now being quizzed by the Central Bureau of Investigation, (CBI), India anti-fraud agency. Sources say, the CBI has now sought permission on diplomatic levels to quiz Ravi Rishi and his companies in the UK.

General V.K. Singh alleged in an interview to an English newspaper last month that he was offered bribes to sign additional orders for Tatra trucks for the Indian Army in 2010. Without naming the company he indicated that the Tatra trucks were “sub standard”.

BEML has supplied over 6000 Tatra trucks to the Indian Army since 1986, without any competition. “The state-owned defence companies get orders on nomination basis, and just become canalizing agencies for imports from overseas without getting technology transfer,” said an executive of an overseas company here.

“There should be competition in buying weapons and equipment, the state-owned defence companies should not be given contracts on nomination basis in the name of ‘strategic and national interest,” added a senior executive of the Federation of Indian Chambers of Commerce and Industry, the Indian industry lobbying agency.

“BEML signed an MoU for a tie up with a company called Tatra Sipox in the UK in 1997, later owned by Ravi Rishi.”sources said. According to Indian law, a contract can only be signed with the OEM.

“While Tatra Sipox (UK) Ltd was incorporated in 1994 in Britain with
Jozef Majsky and Venus Projects Ltd as shareholders, Tatra Sipox as such only came into being in 1998,” said sources.

This means in 1997 BEML signed an MoU with the subsidiary of a company that did not even exist. Ravi Rishi was a shareholder of Tatra Sipox (UK) who later went on to form the company Vectra with which too BEML formed a joint venture.

The story has got murkier as Rakesh Singh, Member of Parliament, claims he had complained to the Indian Defence Minister A.K. Antony in 2008 questioning why the 6×6 Tatra trucks manufactured in India were not being bought when they are available at half the price of Tatra trucks made overseas.

“The immediate impact of the controversy will be putting on hold purchases of Tatra trucks from BEML.” said a defence ministry official, which will mean floating of global tenders for Tatra trucks from overseas markets.

“If the overseas trucks procured come cheaper than the current purchase through BEML then the controversy can boil over into a major scam,” said an analyst.

Bharat Earth Movers Limited (BEML) was established in 1964 as a Public
Sector Undertaking and is under the administrative control of Department of Defence Production, Ministry of Defence. BEML has six manufacturing units and a 10 per cent subsidiary steel foundry all in the state of Karnataka.

BEML has a wide range of technology-driven products in the defence sector including a) Command post vehicle which is a surveillance and reconnaissance vehicle system built on the BEML-Tatra (8X8) vehicle and also BEML-Tatra Driving Simulator, an indoor driving simulator to train drivers by phasing the training through increasing level of complexity in all kinds of terrain with varying visibility and weather conditions.

BEML’s Defence products division, supplies Tatra Vehicles, armoured vehicles and ammunition loader vehicles to the Government

BEML signed an MoA with TDA Armaments S.A.S., a 100 per cent subsidiary of French company Thales for the developme

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