Dec 7, 2009

The Ghosh “Ghost” of Acquisitions

India’somnipresent acquisition woes are likely to continue in the days ahead if thereports coming from the current discussions on the issues of corruption andblack listing are to be believed. As the government has not allowed thosecompanies which had been involved in shady deals with the former head of theOFB Mr Ghosh to proceed with the business they were conducting with theOrdnance Factories as well as the services, it was important that aclarification be obtained from the Central Vigilance Commission and it isapparent that this has been now done with a view to ensure that probity ismaintained. The Defence Minister personally is very particular of ensuring thatthe process is above board and the current processes that have been adopted ofrefereeing the case to the Central Vigilance Commission provides hopes ofimproving the system to some extent in the future.

             Thus the Ministry of Defenceindicated that following decisions have been taken in respect of sevenfirms/companies/suppliers/vendors, supplying defence equipment to the armedforces during the last 2 years and the current year i.e. M/s Israeli MilitaryIndustries, Israel; M/s Singapore Technology, Singapore; M/s HYT Engg; M/s TSKishan and Co. Pvt Ltd., New Delhi; M/s RK Machine Tools; M/s BBT, Poland; M/sMedia Architects Pte, Ltd, Singapore:-

(a)     Where contracts have been concluded andalso executed, action should be taken against the companies, as per theprovisions of the contract, on completion of the CBI investigation.

(b)     In regard to the tender cases ofprocurement/execution, where the tender process has already been started andwhere the companies mentioned in the FIR are figuring, each case should bedealt as per the tender conditions, keeping in view of the FIR in question. Notender should be awarded to the companies mentioned in the FIR unless the CBIinvestigation clears them totally.

(c)     The tender cases of procurement/execution,where the tender process has not yet started, there should be no dealing withthe companies mentioned in the FIR, till the finalization of investigation.

(d)     Contracts that have been entered into andare being executed or pending execution shall remain on hold. In these cases,further action will be taken as per the contractual provisions on receipt ofthe investigation report of the CBI. Some restrictions on procurement cases inrespect of M/s IAI or M/s Rafael have also been placed. [Based on MOD IndiaPress Release].(DEC 2009)