Israeli, Italian, British, South African arms firms in defence ministry’s graft list

By Rajat Pandit

NEW DELHI: Four foreign and two Indian arms companies remain blacklisted or “debarred” by the government, while dealings are “suspended” with another 14 and “restricted” with four, according to a fresh vigilance circular issued by the defence ministry (MoD) on Monday.
Global arms majors Singapore Technologies Kinetics (STK) and Israel Military Industries (IMI) fall in the first category of blacklisted firms, while Denel (South Africa), Leonardo SpA (erstwhile Italian conglomerate Finmeccanica) and its UK-based subsidiary AgustaWestland International are present in the “suspended” group.
Engine manufacturer Rolls Royce, Tatra truck manufacturer (Czech Republic) and Israeli firms Rafael and Israeli Aerospace Industries (IAI) are the four companies with whom “restricted procurements” are allowed on the basis of operational urgency, national security and non-availability of other alternatives. All these four firms have several on-going projects in India.

“The vigilance circular reiterates to all stakeholders, including Service headquarters, about the status of the firms concerned. The categories — debarred, suspended and restricted procurement — have been clearly demarcated for the companies caught in corruption and other cases,” said an official.
Apart from STK and IMI, the other blacklisted firms are Rheinmetall Air Defence (Zurich), Corporation Defence (Russia), T S Kisan & Co (New Delhi) and R K Machine Tools (Ludhiana). No business dealings are allowed with these six firms till 2022.
Recurring scandals around global artillery manufacturers, which started with the Swedish Bofors one in the mid-1980s to Denel, STK and Israeli Soltam in later years, ensured the Army did not induct a single modern 155mm howitzer for over 30 years. BAE Systems, which now owns the original Bofors firm, has only now begun preliminary deliveries of M-777 ultra-light howitzers for testing under the $737 million deal inked with the US for 145 such guns, as earlier reported by TOI.
MoD has not yet blacklisted Leonardo SpA and AgustaWestland, which are enmeshed in the infamous VVIP helicopter scandal here. Former CEOs of the two companies, Giuseppe Orsi and Burno Spagnolini, were last month acquitted by an Italian court on the grounds of insufficient evidence. But the CBI is pursuing the case against ex-IAF chief S P Tyagi and others for alleged corruption in the Rs 3,546 crore deal inked in 2010 to supply 12 VVIP helicopters to India.

The other firms involved in the helicopter case, IDS (Tunisia), Infotech Design Systems (Mauritius), IDS Infotech (Mohali) and Aeromatrix Info Solution (Chandigarh), also figure in the “suspended” firms’ list. Six firms connected with the main accused in the naval war-room leak case of 2005 re also in this category.

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