Sunday, May 20, 2012

Tatra-Vectra-Rishi triangle a threat to defence?

Rishi’s Vectra Group is the real financial gainer?
A source and senior BEML employee who has worked closely with Tatra truck deals told DNA that Rishi has been “managing” Tatra deals and used to get Tatra orders cleared every year by bribing officials in the Indian Army and BEML. His company is the real beneficiary of this Tatra deal and he might have wanted to push Gen VK Singh to sign the deal clearing another tranche of trucks, said the source.
According to the Czech complaint, Tatra Czech’s board of executives is obligated under the law to exercise its role diligently. However, by allowing Tatra Czech to supply completely knocked down (CKD) sets of Tatra freight vehicles to BEML Ltd indirectly (via Tatra Sipox/Vectra Group), Tatra Czech is stripped of any profit, which is undoubtedly not diligent. “At a common rate of 0.96 million CZK per set and a usual margin of 10%, TATRA Inc. suffered between 2005 and 2010 a loss of profit of 270 million CZK,” the complaint states. It is obvious that due to this indirect sale, Tatra Czech commits tax evasion to the scale of several dozens of millions of Czech Korunas, says the complaint.
Vectra Group a Tax Evader?

Isn't Tatra-Vectra-Rishi triangle a threat to defence? by Sankar Ray
The Tatra Truck scam unfolds like an unending chain reaction. Revelations, one after another, bring out stupefying details. Much before General V K Singh divulged the alleged Rs 14 crore kickback offer, Czech website carried an explosive interview with Václav Láska, a former high-ranking police investigator, lawyer and an exregional head of watchdog Transparency International on 27 April last. The major stakeholder of the Czeck truck manufacturer faced severe financial crisis due to tunneling and tax evasions. Speaking to the widely read Czech daily Právo, Láska disclosed that a criminal complaint was lodged against the management of Tatra trucks and one of the firm's major shareholders, Indian businessman Ravinder Kumar Rishi, deputy chairman of Tatra's supervisory board, and the owner of Vectra Limited. The sale of truck parts at knock-down prices to India via an intermediary British company damaged the company, it stated. Criminal complaint from the Czech government is too crucial for the Indian ministry of defence (MoD) to ignore. "If the criminal complaint is deemed to be justified, steps could be taken which will curtail further losses and also stop additional tax evasion," Láska told Právo.
The Czech manufacturing firm which has been supplying complete knock-down kits containing all the components of haulage to the India's central public sector undertaking BEML Limited where the vehicles are assembled, incurred losses running into millions of crowns. Láska told the Czech morninger, "The Tatra company sells kits to the British company Vectra Limited without a profit margin, and even at prices lower than the cost of manufacturing. All margins from this business go only to the accounts of the British company. The fact that the representatives of Tatra allow these transactions clearly contradicts the principles of sound economic governance."
Was the MoD, particularly the defence minister A K Antony whose DNA is his unimpeachable integrity unaware of the news in one of the largest selling dailies in Prague? It's very unlikely. Diplomats at the Indian embassy in Prague read and scan the Czech daily regularly. The so-called defence analysts - I mean the majority of them - might have kept their eyes closed and ears shut as these pundits keep defence establishment in good humour. About the Institute of Defence Studies and Analysis which receives substantial funds from the MoD, the less said, the better.
British-registered intermediary firm Vectra Limited, the intermediary, frequently purchased the CKD kits at below production cost. The role of biggies at the helm of the Indian PSU BEML which assembles the vehicles and their bonhomie with their counterparts in Vectra Limited that frequently purchased the CKD kits at below production cost is murky and has to be probed. Let the defence pundits be kept at bay Rishi has been the de facto negotiator for both Tatra and Vectra. Láska snapped fingers at Rishi for indulging in misinformation for pecuniary gains. In 2010, alone Tatra sold 600 CKD kits to the BEML ( other than additional commitment of 460 kits in the same year).
Doubts about under-the-table deals are no hearsay based, nor is the total amount of kickbacks confined to barely Rs 14 crores. The subterranean transactions in which were involved people who were not in uniform must have been several times more. Mr Antony knew everything but remains mum, very much contrary to his style of politics and ministership. Was he being prevented by a any extra-constitutional authority from dealing with the matter freehandedly?
According to Láska, between 2005 and 2010, Tatra incurred losses in potential profit to the tune of Kč 270 million (Rs 750 crores). He based his calculations on a profit margin of 10 percent per kit. The management intentionally forfeited for selling the goods to Vectra Limited at a knock-down price. "By transferring the considerable profits to the British company, the Tatra company reduced its income tax payments by tens of millions of crowns," he added That means the Czech Republic had to absorb 10 per cent loss due to under-invoicing. But Vectra supplied trucks at more than 100 per cent of the amount for which Tatra sold in the open market. This scam goes abated for the last ten years and if Rishi cheated Czechs by 10 p.c., MoD or BEML's financial damage is ten times more.
Trucks produced by Tatra, one of the world's oldest manufacturers of motor vehicle, enjoyed a high reputation during the 'communist' era. The quality of the trucks is not known to have been questioned. The successful launch of Agni - ICBM was from Tetra trucks. The question is about the murky role of arms dealers or the intermediaries for whom business ethics has no meaning.
Isn't Tatra-Vectra-Rishi triangle a threat to defence?

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