Monday, April 9, 2012

Payments from BEML actually goes to a Tax Haven

Tatra deal: CBI summons BEML officials
by FP Staff Apr 9, 2012

The CBI has summoned several Bharat Earth Movers Limited (BEML) officials in connection with alleged irregularities in the procurement of Tatra trucks for the Indian army. The summons comes on the back of several raids on BEML offices over the past week.
Earlier the CBI revealed that it was looking into payments made by defence PSU BEML to Tatra Sipox UK for the supply of all-terrain trucks, and said it would send a judicial request to the United Kingdom seeking details of its financial transactions and ownerships.
The Tatra deal has been under the CBI scanner: Reuters
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.
And according to an Army whistle blower, Brigadier (Retd) Inder Mohan Singh, asking questions with regards to the BEML – Sipox deal was a big no- no.
The Brigadier said that he wrote in to ask for details of the price of the trucks, and for copies of the transfer of technology agreement in 2003. The very next day, he had a surprise visitor waiting in his office.
“At 9 o clock, when my office had barely opened, a BEML officer was sitting in my office,” Brig IM Singh told CNN-IBN. “He said, ‘Sir, marwadiya sabko’ (You’ve killed everyone).”
Asked what he meant, the visitor confided: ‘The letter you faxed yesterday will create a lot of trouble.”
If anything, it was Brig IM Singh who found himself in trouble. His letter, making enquiries about the deal, was cancelled, and he was transferred out of the Equipment Branch.
“The biggest middlemen and the biggest agents are the defence PSUs,” he says. “They do not manufacture anything on their own.”
Defence journalist Ajai Shukla too says that the “real story” in the Tatra case isn’t about the performance of the trucks or about the Czech company. “It is a story that plays out day after day how the defence PSUs – like BEML in this case – take the entire system for a ride as a result of their proximity to the Ministry of Defence.”
What BEML has done, says Shukla, is that it has bought the equipment in knocked down condition overseas, assembled it in India, added in a heavy mark-up in price, forgotten entirely about its promise of indigenisation and sold the trucks to the army at almost twice the price it bought it at.
Meanwhile the BJP has questioned the government on as to why it continued dealing with Vectra head Ravi Rishi despite doubts being raised about the company.
Tatra deal: CBI summons BEML officials

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