Money laundering in Tatra truck deal: ED tightens noose on Ravi Rishi

Jagran Post -Posted on: 13 Apr 2012, 12:21 PM

New Delhi: After being interrogated by the CBI for his alleged role in the Tatra truck deal, the NRI businessman Ravi Rishi now has to face the heat from the Enforcement Directorate (ED), which is tightening its noose around him.

The ED has filed a case against Rishi under the Prevention of Money Laundering Act (PMLA) and is mulling to recover the blackmoney from the accused. After going through the FIR filed by the CBI and the other documents, the ED officials have now decided to look into the case from the perspective of alleged money laundering.

According to sources, the links of the Tatra truck deal have been traced to England, Czech Republic and Slovakia. Earlier, in order to ascertain the original price of the supplies and detection of blackmoney earned by Rishi during the sale of trucks to the BEML, the CBI had sought help from the ED.

On the lines of the CBI, the ED has also made Rishi, BEML, Army and Defense Ministry officials as accused in the money laundering case.

Rishi has been accused of entering into a conspiracy with the officials of the Defence Ministry, Army and BEML in signing an agreement with England based company Tatra Sipox. As per the agreement, Tatra Sipox had purchased components of trucks from Czech Republic and Slovakia and supplied it to BEML at double price.

Later, the BEML manufactured trucks from these parts and supplied them to the Army which in return made the payment to Tatra Sipox.

According to the investigating agency, a share of the blackmoney earned by Rishi in the deal was distributed to the officials of the Army, Defence Ministry and BEML. The ED is now looking for the officials involved in the scam to freeze their properties.

Tatra case: Rishi’s money trail leads CBI to UK

CNN-IBN India | Updated Apr 08, 2012 at 09:46pm IST

New Delhi: The CBI is looking into the payments made by defence PSU BEML to Tatra Sipox UK for the supply of all terrain trucks and plans to send judicial request to the United Kingdom seeking details of its financial transactions and ownerships.
The agency suspects that payments from BEML were actually going to a tax haven, CBI sources said, adding that they are probing into it but added that the investigations are in preliminary stage.
The sources said at present they are likely to send Letters Rogatory to the UK seeking information on financial transactions of Tatra Sipox UK in which Vectra Chairman Ravinder Rishi has been a Director, owning substantial shares.
The agency will also demand details of Tatra Sipox UK’s association with Czech-republic based Tatra a.s, they said.
Rishi has refuted allegations of any wrong doing and is said to be co-operating with the agency during his questioning sessions during last week, the sources said.
The CBI is now focusing on the role of officials of Defence Ministry, BEML and army and may question them in connection with the case soon, they said.
The sources said it was in 1997 that Tatra Sipox UK signed the truck supply deal with BEML which was in alleged violation of defence procurement rules which say that procurement should be done directly from original equipment manufacturer only.
The CBI has alleged that since Tatra Sipox UK was not the original manufacturer of these all terrain trucks, the rule that defence procurements should be made from original
manufacturer was violated.
Meanwhile, Czech Republic-based Tatra a.s. had said in a statement that it supplies for India various truck components (“CKDs”) that make up approximately 30 to 35 per cent of a complete vehicle.
“The remaining components are made or supplied by other manufacturers or by BEML, an Indian government controlled company that also assembles the Tatra branded vehicles and then sells and delivers them to customers within India under license agreement for Tatra a.s,” it had said in a statement.
It had also stated that neither Ravi Rishi nor his investment company Vectra Limited, control or have controlled — directly or indirectly — Tatra a.s. “The British company Vectra Limited is a minority stakeholder in Tatra holdings and in principle holds one of
the four votes.
“Nonetheless, Tatra will request from Mr Rishi and Vectra Limited an explanation of the information about any initiated investigation of him and Vectra Ltd by Indian Central Bureau of Investigation (CBI) as it relates to sales of products branded with the ‘Tatra’ name,” it had said in a statement.

Tatra deal: CBI summons BEML officers

CNN-IBN India | Updated Apr 09, 2012 at 03:54pm IST

New Delhi: The Central Bureau of Investigation (CBI) on Monday summoned Bharat Earth Movers Limited (BEML) officers in connection with the Tatra deal controversy. The officers were being questioned at the Delhi office of the investigative agency.
This is the first time BEML officers have been quizzed in connection with the case.
The Tatra truck deal is at the heart of Army Chief General VK Singh’s allegations that he was offered a bribe.
The CBI on Wednesday raided the Bangalore office of BEML and seized the records related to the Tatra trucks deal, sources claimed.

Tatra deal: CBI to meet General VK Singh, ex-Army officer

India | Updated Apr 12, 2012 at 04:50pm IST –IBN Live

New Delhi: The Central Bureau of Investigation (CBI) has sought an appointment with Army Chief General VK Singh on his letter detailing the Rs 14 crore bribery offer to him by a former Army officer to clear the purchase of sub-standard all-terrain vehicles for the forces. CBI officers are likely to meet General Singh on Friday as the Army Chief is not in New Delhi.
Lieutenant General (retired) Tejinder Singh, who allegedly offered the bribe on behalf of Tatra trucks, will also face the CBI officers after the investigating agency meets the Army Chief. The CBI will try to get more details from the Army Chief on the allegations levelled by him against Lt Gen Tejinder Singh.
General VK Singh will be asked why he delayed complaining about Lt Gen Tejinder Singh’s alleged bribe offer. The Army Chief would also be asked to explain why no immediate action was taken by him on the bribe offer.

Senior CBI officers involved with the investigation feel that the matter involves the Army Chief and another very senior Army officer, and so they should study all the details of the case and proceed accordingly. They have also sought the opinion of Attorney General Goolam E Vahanvati on the allegations.
On March 26, in an interview to English daily, the Army Chief had alleged that he was offered a bribe to clear a tranche of Tatra trucks. The Army Chief and a press release by the Army Headquarters hinted at the involvement of Lt Gen Tejinder Singh.
General Singh said that he had informed Defence minister AK Antony about the bribe offer. Antony ordered a CBI inquiry into the allegation after the matter came to light.
Refuting the allegations Lt Gen Tejinder Singh filed a defamation case in the Patiala House against General Singh and four other senior Army officers. The court will give its order on April 21 whether or not to summon General VK Singh.
Besides General VK Singh, he has also named Vice Chief of Army Staff Lieutenant General SK Singh, Lieutenant General BS Thakur (Director General Military Intelligence), Major General SL Narshiman (Additional Director General of Public Information) and Lieutenant Colonel Hitten Sawhney.

Tatra deal: CBI probes new company after Gen VK Singh accuses Vectra’s Ravi Rishi

Neeraj Chauhan, TNN Apr 13, 2012, 12.40AM IST

NEW DELHI: CBI is investigating Venus Projects, a second company belonging to London-based businessman Ravi Rishi of Vectra group, after the NRI was named by Army chief Gen V K Singh as the person behind a Rs 14-crore bribe offer made to him in September, 2010.

The CBI is scanning Rishi over a complaint by Gen Singh that he was approached by retired Lt Gen Tejinder Singh for a contract for supply of Tatra trucks that the Army chief has said were substandard.

Rishi is being investigated for his links with Venus Projects as agency sources said the company was used by him for purchasing spare parts for Tatra trucks. The agency believes that the deal was signed between Rishi’s Vectra Group and BEML officials within three days of their meetings in 1997.

Sources said, “There was a meeting between BEML officials, Ravi Rishi’s Vectra group, Tatra Slovakia and other associates on June 11, 1997, in Slovakia, and on June 14, 1997, the MoU for procuring 600 Tatra trucks was signed in Bangalore”. CBI suspects BEML, a defence PSU, did not have a board meeting before the hurriedly-signed MoU.

Venus Projects is being seen as another link between Rishi and the Czech firm that projected the UK-based businessman’s Vectra group as the original equipment manufacturer to ensure that it remained central to any deal signed with BEML for supply of Tatra trucks, and didn’t flout the procurement norms.

Agency sources say that they have sought time from Gen V K Singh to know more about the bribe offer. The probe team is hoping to meet the Army chief on Friday, and later call Tejinder Singh for questioning.

The agency has sought documents of Venus Projects and Tatra Sipox (UK) to know about the meetings held in June, 1997. CBI is also likely to call officials of BEML who were involved in the MoU signed on June 14, 1997. CBI is also examining a large number of documents related to contracts of BEML for procuring Tatra trucks since 1997. The agency will also be questioning BEML chief V R S Natarajan soon.

The agency is also in the process of sending Letter Rogatories (LRs) to Czech Republic (original Tatra a s is based there), Slovakia and the UK.

Gen VK Singh stalled BEML’s 1,000 truck order in 2010

TNN | Apr 14, 2012, 12.29AM IST

NEW DELHI: Bharat Earth Movers Limited (BEML), which is in the eye of the storm kicked up by the Army chief’s claim about a Rs 14-crore bribe offer, was preparing to supply 1,000 Tatra trucks in 2010 when General V K Singh stalled the entire acquisition.

Sources said BEML, the Bangalore-based defence PSU, had on the assurance of the then Master General of Ordnance (MGO) of the Army in 2010, had taken “advance action” for supply of 1,000 Tatra vehicles. All these vehicles were to of 6×6 and 8×8 variants.

It is not clear if Gen Singh refused clearance after September 22, 2010, the day he was allegedly offered the bribe by Lt Gen Tejinder Singh on behalf of Tatra.

Tatra truck purchases are usually sent by MGO directly to the ministry of defence (MoD), BEML later pointed out to the MoD. But in 2010, the Army chief had asked for the Tatra file and put the acquisition on hold. Instead, the Army moved a proposal to the Defence Acquisition Council, headed by defence minister A K Antony, for a competitive global tender for the purchase of 6×6 and 8×8 trucks.

The last order for Tatra trucks were placed with BEML in March, 2010, a few days before Gen VK Singh took over as the Army chief on March 31. The last order was for 788 vehicles out a total projected requirement of 3,296.

While the last order was placed by MGO Lt Gen Vinay Sharma, his successor told the BEML that there was no requirement for new vehicles to be acquired from revenue budget.

The Army is presently processing the global competitive tender, which could take several months to complete.

The forces’ stand on Tatra acquisition would be a key component of the ongoing CBI probe into Gen Singh’s allegation that he was offered Rs 14 crore bribe for clearing the purchase of Tatra trucks.

While many of the documents related to Tatra deal – from the Army HQ, MoD and BEML – have been handed over to the CBI, indications are that the agency is yet to get any ‘breakthrough’ documents to show corruption trail in the Tatra deal.

CBI officials would be meeting with Gen Singh, who was away in Punjab on Friday, for collecting further clarification to his written complaint about the bribe offer.

Antony talks tough, says will cancel ‘murky’ deals

TNN Mar 30, 2012, 01.32AM IST

NEW DELHI: India will not hesitate for a moment to cancel any defence deal, even if it’s in the final stages of finalization after technical and commercial evaluations, if any malpractice or corruption is found in it.

With murky wheeling and dealing in arms deals again resurfacing after Army chief General V K Singh’s allegations as well as some unsubstantiated charges of irregularities in the $20-billion MMRCA project doing the rounds, defence minister A K Antony on Thursday made it clear that action would be taken even if the contract had already been inked.

India, said Antony, had enough safeguards like the “integrity pact” to protect its “interests and money” in already-inked contracts worth over Rs 100 crore. “We will take strong action if any malpractice, corruption or lobbying is established…there will be no mercy, there is zero-tolerance for corruption,” he said while speaking at the inauguration of the ‘DefExpo-2012’ here.

As for the MMRCA (medium multi-role combat aircraft) project, under which final commercial negotiations are now being held to acquire 126 French Rafale fighters after elimination of other contenders, Antony said an inquiry was being conducted into an MP’s complaint of alleged wrongdoings in it since the government has to be “careful” at every stage to ensure “no foul play”.

Two of the 15 members in the defence ministry’s Contract Negotiation Committee (CNC) have questioned the methods adopted to conclude that Rafale was cheaper than Eurofighter Typhoon in lifecycle costs.

“But the matter was resolved, with the observations of the two being recorded…all committees face dissent from one or more members…it does not mean the process will come to a stop,” said a senior official.

Antony said the CNC would take at least six months to conclude. Then, there will several layers of scrutiny at different levels, ranging from finance to the Cabinet Committee of Security, to vet the deal.

“We do not throw any complaint into the dustbin. There is a parallel inquiry also going on to inquire into the MP’s complaint. If we are satisfied that there is no foul play, then only will we go forward…We will proceed only if everything is clear,” he said.

CVC probe sought in Navy’s procurement of torpedoes

Apr 08, 2012 | PTI | New Delhi – The Asian Age

The Navy’s deal for procurement of torpedoes for Scorpene submarines from an Italian company has come in for questioning with a Member of Parliament writing to the Central Vigilance Commission seeking a probe into alleged corruption in the selection.
Jainarayan Prasad Nishad, who had earlier written to Defence Minister A K Antony, has alleged that WASS heavy water torpedo was selected for procurement “without validation of critical parameters at sea for speed and range” as specified in the Request for Proposal (RFP).
The RFP clearly stated that only those vendors who could successfully perform dynamic trials of the offered torpedo would be considered but “this was totally ignored in the case of WASS, Italy and the deal was pushed in favour of WASS, thereby ignoring the technical conditions laid in the RFP, Nishad has said.

Citing “(defence) ministry sources” and articles published in some defence magazines, the JDU MP from Bihar has claimed that in the case of the deal, the Defence Procurement Procedure (DPP) was “manipulated and violated for pecuniary financial gains”.
In his letter to Antony, Nishad has contended that the then DG Acquisition had recommended re-issuance of the RFP as the Defence Procurement Procedure was “not being followed and the RFP was ab-initio defective” but later, the Navy used the “excuse” of urgency to reverse the decision and sent it to the Defence Acquisition Council (DAC) for approval to consider WASS “as a resultant single vendor”.
Alleging wrongdoings in the process that dates back to 2007 and 2008, the MP claimed that to ensure the RFP was not cancelled, the Navy had “deliberately cleared” another bidder ATLAS Elektronik of Germany at the TEC (Technical Evaluation Committee) stage and rejected it after trials.
“Creating a single vendor scenario through manipulation to overcome the DPP, which has happened in this case, and selecting an inferior product, could lead to the security of the nation being compromised for pecuniary financial gains,” he warned in the letter to Antony.
On getting no response from Antony, the MP shot off a letter to CVC Pradeep Kumar along with the one written to the Defence Minister in January this year. “This has vigilance angle,” he wrote, requesting probe into the matter “seriously” and take necessary steps to stop any possibility of corruption in the deal.
Earlier, ATLAS Elektronik had also cried foul play and sent letters of complaint to the Defence Ministry.
Meanwhile, reacting to the allegations levelled by Nishad, Navy spokesperson Commander P V S Satish said, “For the moment all I can say is that all acquisitions undertaken by the Indian Navy are done with due care and adherence to laid down procedures”.
“Trials were conducted as per the procedures approved by the DAC and were acceptable to both the vendors (in the contract),” he added. The Navy has plans of procuring around 100 torpedoes for the fleet of its six Scorpene submarines, which are being constructed by the Mazagon Dockyarads Limited (MDL) in partnership with French DCNS.

AK Antony and the problem of corruption

KP Nayar

Wednesday, 11 April 2012 09:47

“Will Minister Antony resign?” More than any other, this is the one question that I have been asked by Americans in recent weeks about the defence minister who has been in the news for the better part of this year. Most of the people asking this question have some connection with the military-industrial complex in the United States of America or the country’s defence and strategic community.

The reality, howsoever unpalatable, is that few defence ministers can survive after incurring the personal displeasure of an American defence secretary, unless they are defence ministers in Russia and China or in countries like Iran or North Korea, which are in various stages of confrontation with the US.

A.K. Antony attracted the wrath of the Obama administration last year by his determined refusal to receive the then defence secretary, Robert Gates, who tried to inject himself into a US delegation that was to travel to India for the second round of the “strategic dialogue” between New Delhi and Washington. Gates wanted to lobby with Antony on behalf of American companies, which were then in the running for 126 medium multi-role combat aircraft being sought by the Indian air force, the biggest military aviation deal hitherto.

Antony made it clear to his cabinet colleagues, who were persuaded by the secretary of state, Hillary Clinton, to plead the case of the Pentagon’s civilian head, that if Gates arrived with Clinton he would go to the remotest location in Kerala where even his mobile phone had no signal for the duration of the American’s stay in New Delhi. Kerala was then in the middle of its state assembly election campaign, which gave Antony enough of an excuse to be in his home state.

The defence secretary did not give up. Gates used the ruse that he was demitting office in July and that he wanted to make a farewell call on Antony: at that point, April was being considered for the strategic dialogue, which eventually had to be postponed because of the defence minister’s insistence that he will not meet Gates as long as the aircraft contract was at a sensitive stage in the acquisition process.

Pentagon officials have told reporters on background that “the defence secretary was informed that it would be suicidal” for Antony to meet Gates and that this message was conveyed by Indian diplomats in Washington, who were negotiating the strategic dialogue arrangements with the Obama administration at that time.

At the end of April 2011, American companies were eliminated from the race for the multi-role combat planes, the US ambassador, Timothy Roemer, resigned the next day, and Gates lost any further interest in making his farewell call on Antony. The strategic dialogue eventually took place in July last year without a top-level defence participation.

After an unstated policy of having no ministerial exchanges in defence for 50 years — except on a solitary occasion, that too botched — US defence secretaries have lately taken exceptional interest in their Indian counterparts and senior Indian ministers in the last decade. The most famous of such exchanges was when Donald Rumsfeld, who was predecessor to Gates, called on the deputy prime minister, L.K. Advani, at his hotel on a Sunday in a well publicized effort to highlight a new chemistry in their ties.

Rumsfeld felt somewhat proprietary about the new defence relationship that the administration of George W. Bush considerably advanced with India, but luckily for New Delhi, he did not stay at the Pentagon long enough to see Washington’s hope of bagging the much-sought-after combat aircraft deal crumble into dust. There is no saying how the mercurial Rumsfeld would have reacted to such a disappointment. Gates, a man of great dignity, took the setback in his stride, at least in public.

The Pentagon is not alone in being disgruntled by Antony’s ways. He has consistently refused to visit Israel, which interchangeably shares the first or second spots with Russia among the sources of arms imports for India.

As if to add injury to insult, last month the defence ministry blacklisted Israel Military Industries for 10 years for allegedly paying bribes to secure contracts in India. IMI is not just another arms-seller. It is owned by the government in Tel Aviv, a leading weapons manufacturer for Israel’s defence forces.

It was not expected that Tel Aviv will take the ban lying down. Additionally, the ban by Antony’s ministry has cast a shadow over plans by the Netanyahu government to privatize IMI. There are now question marks about the timing of the privatization: if the world’s number one arms buyer — India — has found IMI unsuitable to do business with, it could have ramifications for investors seeking to buy into the company.

Those familiar with New Delhi’s lay of the land in such matters were not, therefore, surprised when grumblings of discontent, which began as whispers after Antony rebuffed Gates, grew louder following the rejection of American bids for the multi-role combat aircraft. It was not entirely unexpected that after the decision against the Israelis, Antony would be put in a spot by a steady flow of news stories and purportedly thoughtful op-ed articles.

The Americans and the Israelis are not alone in being at the receiving end of Antony’s efforts in full throttle to do what he can to curb corruption in defence purchases and create a level playing field. Singapore is a country with which India enjoys a relationship that is totally free of trouble. That has not, however, prevented Antony from banning Singapore Technologies Kinetics from future contracts for a decade.

This land systems and specialty vehicles company has launched an all out bid to clear its name, including recourse to the Supreme Court. It has also threatened to seek international arbitration, creating an irritant in bilateral relations.

Russian defence suppliers who have had a free run of New Delhi’s procurement process for many decades have similarly been slapped with punitive sanctions as part of Antony’s anti-graft drive. The defence minister has further angered Swiss, South African and many more arms manufacturers, lining up a formidable array of forces, all of which would be glad to see him move out of his present job.

Typically, nobody is criticizing Antony for cracking down on corruption. Instead, the strategy of those who want him out of the way is to attack Antony for slowing down the modernization of the armed forces by creating bottlenecks in arms purchases, and for creating a trust deficit between the civilian and uniformed segments of the defence establishment. All in all, the effort is to show up the defence minister as a man incapable of running an enterprise as vast and complex as the one for which he is tasked with providing leadership.

The age controversy about General V.K. Singh, the army chief, was the best thing that Antony’s detractors could have hoped for. Unfortunately for the defence minister, both propriety and constitutionality demand that he cannot truthfully tell his side of the story.

For instance, Antony personally believes that the army chief is not lying about his age and that General Singh was born in 1951. Similarly, the General has been a steadfast ally of Antony in what the latter is trying to do about corruption in the defence establishment. It may be a hard idea to sell, especially after a sensational story about troop movements, but the personal warmth and respect for each other between Antony and Singh are nothing short of total. Which is why there has been no move to dismiss the army chief or get him to resign. Even though Antony believes that General Singh made a mistake about his date of birth, an episode from his own past prevents Antony from doing anything about it except to follow the letter of the law. Antony was chief minister of Kerala when a similar controversy dogged the state government.

Raman Srivastava, an Indian Police Service officer of the Kerala cadre who became director-general of the state police and later headed the Border Security Force, was at the centre of this controversy. A mere five months separate him and his brother, Vikram Srivastava, an IPS officer of the Uttar Pradesh cadre, who became director-general of the Central Reserve Police Force: a biological impossibility since both the brothers were born of the same mother.

As chief minister, Antony did not allow the Kerala cadre officer to change his date of birth. There is no way he would have acted any differently with General Singh. What is more, it is Antony’s estimate that there are at least 3,000 such cases of incorrect birthdays in government service records. That is a Pandora’s Box, which is best left shut.

-The Telegraph, Calcutta

Corruption will not be tolerated: AK Antony

PTI | Apr 11, 2012, 02.42PM IST

KOCHI: In the backdrop of the recent storm over alleged corruption in defence procurements, defence minister AK Antony today said the country’s interests were paramount and there will be “no cover up and no vendetta”.

“India’s interests are our only concern. We are not against any company or country. But India’s interests are paramount”, he told reporters on the sidelines of a function at the Indian Coast Guard here.

Replying to questions in the light of Army chief General V K Singh’s recent claim about alleged attempts to bribe him to favour a sub-standard contract, he said “Corruption will not be tolerated. Even if there is suspicion, a probe will be ordered”.

“No cover up, no vendetta is our policy,” he said, adding if there is an iota of doubt, it would be looked into.

Antony said efforts were on to make defence procurement more transparent. “When people do not get contracts, there will be criticism and allegations. Some companies do try to influence officials and if it is proved action will be taken”.

He said six companies from Israel, Russia, Germany and Singapore and two from India had recently been blacklisted.

The Defence acquisition council meeting last week had sanctioned Annual projects, five-year projects and Long Term Plan from 2012-27, he said.

On reported differences between the Army and the Defence Ministry, he said, “Both are functioning from the same building. There is no communication gap, no confrontation. I function as a joint family. I am very comfortable. I respect the armed forces, their commitment, their dedication. I am proud of it”.

Antony said there was so much demand for joint exercises with the Indian defence forces that “everyone wants to do (it) … ,”

Appeal to clean DRDO of corrupt and anti-national officials