Wednesday, July 28, 2010

India May Blacklist 4 Foreign Firms, 2 Local Firms

Four overseas defense companies face blacklisting in India if the Defence Ministry accepts the latest recommendations of the Central Bureau of Investigation (CBI), India's federal anti-fraud agency.

The CBI recommended that Singapore Technologies Kinetics, Singapore; Israel Military Industries (IMI); Rheinmetall Air Defence, Zurich; and Russia's Corporation Defence be blacklisted.

n a July 28 news release, the Defence Ministry said the recommendations were based on CBI's investigation of a First Information Report (FIR) filed against the former head of India's Ordnance Factory Board, Sudipto Ghosh, who was arrested on corruption charges last year.

The four companies allegedly paid bribes to Ghosh, but the CBI has not released any details of their involvement in the corruption case.

"Further action in the matter will be taken after obtaining the advice of the Central Vigilance Commission (CVC) and the Ministry of Law," the ministry stated in the release, based on Defence Minister A.K. Antony's same-day written statement to the parliament's upper house. "Nexus, if any, between Indian and foreign companies does not appear to have been investigated by CBI in this case."

The blacklisting of Singapore Technologies would affect the pace of the procurement of the Indian Army's 155mm towed artillery gun program, in which the company is competing.

IMI had won the contract for building India's 40th factory under the Ordnance Factory Board at Nalanda in Bihar.

The Nalanda factory, which will make ammunition for the howitzers, will cost about $225 million. The Ordnance Factory Board, in collaboration with IMI, also is producing carbines with interchangeable barrels of 9mm and 5.56mm.

The CBI also recommended blacklisting two Indian defense companies - T.S. Kisan, based here, and R.K. Machine Tools, Ludhiana, for alleged bribes to Ghosh.

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