Thaindian News

New Delhi, July 29 (IANS) The Comptroller and Auditor General (CAG) will conduct a special audit of the procurement contracts signed during the tenure of former chairman of Ordnance Factory Board (OFB) Sudipto Ghosh, who was arrested by the Central Bureau of Investigation on corruption charges, parliament was informed Wednesday.
“The Ministry of Defence has requested Comptroller and Auditor General to conduct a special audit of procurement contracts concluded during the tenure of former Chairman of Ordnance Factory Board,” Minister of State for Defence M.M Pallam Raju said in a written reply in the Rajya Sabha.

The premier investigating agency has arrested Ghosh on charges of demanding and accepting bribes, for criminal conspiracy and criminal misconduct under the Prevention of Corruption Act. The names of seven international and Indian firms figure in the first information report (FIR) the CBI has filed.

Following the FIR, the seven firms - Israeli Military Industries, Singapore Technology, BVT Poland and Media Architects Pvt. Ltd of Singapore, and three Indian companies: T.S. Kishan and Co. Pvt. Ltd., R.K. Machine Tools and HYT Engineering Co - were blacklisted.

The dealings with the companies were “temporarily put on hold” by a June 5 order. The defence ministry then sought advice from the Central Vigilance Commission (CVC) and the law ministry on further dealings with these seven companies.

“The CVC report and the law ministry’s reply on the issue is awaited,” said a senior defence ministry official, requesting anonymity.

The immediate casualty of the blacklisting is the Rs.12 billion ($240 million) deal between IMI and the Ordnance Factory Board (OFB) March 25 to revive a munitions factory at Nalanda in Bihar along the lines of IMI’s ordnance factory in the Tel Aviv suburb of Ramat Hasharon, a project that had taken off after 10 long years.

Originally conceived in the late 1990s when George Fernandes was the defence minister, the Nalanda factory project went into limbo when South African defence major Denel, which was to collaborate in its construction, was blacklisted on corruption charges. The factory was to manufacture the propellant for the ammunition of the Bofors 155 mm howitzers and also Zitara carbines in collaboration with another Indian ordnance factory.

Besides IMI, the blacklisting of Singapore Technology is likely to derail the artillery modernisation programme of the Indian Army that has been hanging fire for over two decades and has been mired in controversy.

Singapore Technology’s Pegasus ultra-light howitzer was a leading contender for the Indian Army’s order for 140 guns worth Rs.29 billion.