Ordnance scam: Six firms barred from business for 10 yrs

In a harsh but expected decision, the government today barred six firms named in the Ordnance Factory Board (OFB) scam chargesheet from business dealings with the defence ministry for 10 years.

The CBI that probed the scam involving former OFB chairman Sudipto Ghosh had recommended that the firms be blacklisted. These include Singapore Technologies Kinetics (STK), Israel Military Industries Ltd and Rheinmetall Air Defence (RAD) three of the largest military manufacturers in their field as well as the Delhi-based T S Kisan and Company, Ludhiana's R K Machine Tool and Russian firm Corporation Defence.

The Israeli manufacturer had won a Rs 1,200-crore deal to set up an ammunition factory in Nalanda that could now be cancelled. It also manufactures well-known small arms, including the Uzi submachine gun, the Tavor assault rifle and the Desert Eagle revolver. In 2002, India signed a Rs 90-crore deal to procure over 3,000 Tavor rifles for its special forces from Israel Military Industries Ltd.

The ban comes at a time when the Naresh Chandra-led committee on defence reforms is examining the issue of blacklisting of firms, which has already limited India's options to procure arms. The committee is examining, among other measures, the possibility of penalising individuals instead.

As first reported by The Indian Express, in June 2009, the Defence Ministry had issued a notice to seven companies after their names emerged in connection with corruption charges against Ghosh. The companies had approached the court against a ban, and the latter had directed the ministry to issue the firms notices before taking a final decision.

" These firms were issued notice to show cause as to why action against them should not be taken consequent to the filing of the chargesheet in the case related to illegal gratification against former director general of Ordnance Factories Shri Sudipto Ghosh and others. The decision to debar was taken today after taking into consideration their replies," Defence Ministry spokesperson Sitanshu Kar said.

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