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Home > News > PTI

Fernandes finds mention in ARV defence deal

October 14, 2006 00:09 IST

The role of former Defence Minister George Fernandes has surfaced in yet another defence deal--purchase of Armoured Recovery Vehicle -- as the CBI alleged that he intervened several times in ensuring the deal goes to a company whose bid was the highest.

According to an FIR filed in a designated court naming former Samata Party Tresurer R K Jain, arms dealer Suresh Nanda and other unnamed officials as accused, the CBI alleged that Nanda had approached Jain to stop the contract going in favour of PSP Bohemia of Czech Republic whose bid for 87 ARVs was the lowest at Rs 247.75 crore.

During the opening of price bids on March six, 1998, the consortium of Slovakia-based Unimpex and BHEL lodged a protest with the Price Negotiation Committee of the Defence Ministry alleging that PSP Bohemia was not the Original Equipment Manufacturer.

The PSP Bohemia accordingly submitted a certificate issued by the Trade Ministry of Czech Republic stating that it had the status of OEM.

It was decided by the Defence Ministry so send a team to Czech Republic to check its manufacturing capability, which was, however, turned down by Fernandes after the meeting took place between Nanda and Jain.

"Fernandes, accordingly, vide note dated November five, 1998 rejected the proposal to send the technical delegation. Thus, the offer of PSP Bohemia, which was the lowest, was dishonestly ignored. Nanda then paid Rs one crore to Jain for getting his work done," the CBI FIR alleged.

Thereafter, fresh offers were invited from Bharat Heavy Electrical Limited and Bharat Earth Movers Limited for supply of 87 ARVs. While the former had a colloboration with Polish Defence Consortium, the latter had a ties with Unimpex of Slovakia.

BEML had the lower bid than BHEL and the Defence Ministry decided to place an order with them. "However, Fernandes intervened in the matter again and asked vide his note dated February 20, 1999, whether the price offered by BHEL is the same as that of BEML and whether both are prepared to supply the spares free of cost," the CBI said.

On receipt of the above note, the Financial Advisor (DS) of the Ministry suggested splitting of the tender between BHEL and BEML if the former agreed to supply ARVs at the same cost that of the latter.

"Fernandes agreed with the above proposal of the Financial Advisor (DS) and approved it on February 27, 1999," the FIR alleged and added there was a wrongful loss of Rs 51.83 crore in the entire deal.

The information also revealed Nanda represented Unimpex which itself was not an OEM but an agent of ZTS Martin of Czechoslovakia.

Nanda received huge funds from Unimpex through various companies and the same were laundered by him through acquisition of assets in the name of his family members and companies," the CBI alleged.

Nanda and Jain have been booked under various sections of Prevention of Corruption Act and Indian Penal Code.

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