Row over bribe: CBI to contact Army chief again

No case has been registered by CBI on General Singh's allegation that he was offered bribe

The Central Bureau of Investigation (CBI) has asked the Chief of Army Staff, General VK Singh, to provide further clarification about his charge that bribes had been offered to him for procurement of, allegedly, substandard Tatra trucks, even as V K Saraswat, Director General of Defence Research and Development Organisation (DRDO), said the performance of the trucks was outstanding, contradicting the Army Chief.

Saraswat also said on the sidelines of the DefExpo exhibition that if there were differences between the Army chief and the minister of defence, these should be "handled carefully".

On Friday, General VK Singh said efforts to create a schism between the minister and him were on by 'rogue' elements. Earlier, in an interview, he had said Rs 14 crore was offered to him as bribe by a retired Army officer, Lt Gen Tejinder Singh, to ensure more Tatra trucks were bought by the Army.

Though no case has been registered on General Singh's allegations, the CBI said it may write to him or meet him next week to seek more information. The Army chief had merely told the CBI that he was offered a bribe but without naming any amount.

Lt Gen (retd) Tejinder Singh has denied he had offered any bribe, and Vectra, the company that owns Tatra, has denied that Tejinder Singh is employed by them.

Talking to Business Standard, Lt Gen (retd) Tejinder Singh said he had a small company, the Emerald Technical and Strategic Consultancy LLP, that had nothing to do either with trucks or any other logistics service. "We supply technical high-end solutions to a small number of clients. It is a small company and I don't need anything more,” Singh said.

As chief of DRDO, VK Saraswat is batting on behalf of Bharat Earth Movers Limited (BEML), to which the trucks were sold by Tatra Sipox (UK) Ltd.

The DNA newspaper has reported that Tatra trucks were bought in violation of the Indian defence procurement guidelines which postulate that equipment can be purchased only from Original Equipment Manufacturers (OEMs). Tatra Sipox is a London-based subsidiary of the Vectra Group incorporated in 1994. This in turn is the largest shareholder in Tatra Czech which owns Czech truck manufacturer Tatra a.s.

Tatra a.s' revenue from sale of trucks, spare parts, services and goods amounted to CZK 2,575 million in 2010. The total revenue earned by the Tatra Group and its subsidiary companies was CZK 4,281 million. Tatra a.s accounts for 60 per cent of revenue of Tatra Czech.

Tatra Czech is listed in the Czech Republic. While 91.62 per cent of the stake is held directly and indirectly by Tatra, 8.38 per cent is with the public.

What is common to Tatra and Vectra is Ravinder Rishi, a British citizen who is on the board of both the companies. There is a complaint against Rishi in a court in Czech Republic, registered last year. According to the complainant, who is anonymous because he fears labour persecution, Rishi misused his position on the board of Tatra Czech [the original equipment manufacturer (OEM) of Tatra trucks] to enable Tatra Sipox (UK) Ltd, a company Rishi's Vectra Group incorporated in 1994 and now owns, to buy knock-down trucks from Tatra Czech at below production cost. Tatra Sipox then sold the trucks to India's BEML at a profit, causing huge losses to Tatra Czech since profits from the sale were being made by Rishi's company, the newspaper reports citing the complaint.

"I hold for important the fact that Tatra Czech was selling Tatra truck to the British company (Tatra Sipox) margin-free, even at prices below the production cost. The entire margin, or all the profit from the transaction, has been earned by Vectra Limited in the UK," states the complaint.

While this is not illegal in India, procuring equipment from a company that is not an OEM is illegal. In its defence, BEML says it bought the trucks from Tatra under licence.