Agencies/New Delhi
India yesterday suspended the head of state-owned BEML as part of an investigation into a multi-million dollar defence deal, the second scandal in less than a week to hit weapons procurement in the world’s biggest arms buyer.
The scandal involves allegations by former army chief General Vijay Kumar Singh that he had been offered a Rs140mn ($2.8mn) bribe to buy a faulty batch of Tatra trucks for the army.
The ministry of defence said V R S Natarajan, chairman of Bharat Earth Movers Limited, an engineering and defence firm, was asked to leave his post for the duration of the inquiry by the Central Bureau of Investigation (CBI).
“The government has put the MD of BEML V R S Natarajan under suspension following a recommendation by the CBI that he should be kept away from the post to ensure a fair investigation,” a government statement said. Natarajan has denied all claims of corruption in the public sector firm.
“I have no reaction. I respect the government’s decision, I will come out clean,” Natarajan said yesterday.
The move comes a few days after the defence ministry issued a show cause notice to the BEML chief for slapping a defamation notice against Gen Singh without its permission.
Defence ministry spokesman Sitanshu Kar said the investigating agency was looking into various charges against the BEML chief.
“The charge of CMD has been given to P Dwarkanath, the senior most functional director in BEML,” he added.
On Saturday, an Indian businessman and his wife were charged after the CBI investigated allegations that government officials were bribed to stop a Swiss subsidiary of Germany’s Rheinmetall AG from being blacklisted.
The CBI is investigating BEML after the former army chief said in March he had been offered a $2.8mn bribe to buy faulty Tatra trucks for the army. That accusation was seen as an attack on the defence ministry for not taking action on corruption in weapons procurement.
BEML assembles Tatra trucks for the army. Tatra is a Czech company, but several firms are now involved in its subsidaries, including British-based Vectra.
Gen Singh said the army already had 7,000 of these “sub-standard” vehicles and many had been sold at “exorbitant prices with no questions asked.”
Natarajan has denied that the Tatra trucks were obsolete and recently threatened to sue Gen Singh unless he apologised.
The BEML was established a few months after India’s humiliation by China in the 1962 war.
Making rail coaches, mining equipment and supplying sundry defence items, the Bangalore-based defence public sector unit has had an almost uneventful run, with modest dreams of having a billion dollar turnover by 2013-14 to coincide with its golden jubilee.
India’s defence ministry has put in place strict guidelines for arms deals to crack down on corruption at a time when Asia’s third-largest economy is on a weapons-buying spree to modernise its military.
India is the world’s largest arms importer.
In another investigation, Italian magistrates are looking into allegations that payments were made to secure a €560mn ($737mn) helicopter deal with the Indian Air Force that was won by Finmeccanica.
