The BEML management and ministry of defence (MoD) officials have often denied charges of engaging an agent, in violation of ministry guidelines, to procure Tatra truck components.
According to them, Tatra Sipox (UK) Ltd, the company supplying the components to BEML, is a wholly owned subsidiary and marketing arm of the Slovakia-based original equipment manufacturer (OEM), Tatra Sipox a s.
DNA’s investigation, however, finds this claim to be false.
In response to an NDTV news report on May 8, 2005, alleging a dubious defence deal relating to Tatra trucks, VRS Natarajan, chairman and managing director of BEML, issued a press release dated May 10, 2005, saying Tatra Sipox (UK) Ltd was a fully owned subsidiary and marketing arm of Tatra Sipox a s (Slovakia).
Within 24 hours, India’s embassy in Bratislava, the Slovak capital, issued a letter to Tapan Ray, then joint secretary in the defence ministry, confirming that Tatra Sipox (UK) was a fully owned subsidiary of Tatra Sipox a s (Slovakia).
DNA has a copy of the letter written by MK Lokesh, India’s ambassador in Slovakia, on an official letterhead (see extract from embassy letter above).
But documents with DNA reveal that Tatra Sipox (UK) Ltd has no association with the Slovakian OEM.
While Tatra Sipox (UK) Ltd was incorporated in 1994 in Britain with Jozef Majsky and Venus Projects Ltd as shareholders, Tatra Sipox a s came into being only in 1998, according to an extract of the business register available on the official website of Slovakia’s justice ministry.
This means in 1997 BEML signed a memorandum of understanding (MoU) with the subsidiary of a company that did not even exist.
Further, since its birth, the shareholding pattern of Tatra Sipox (UK) has changed many times but never has the Slovakian company held even a single share, let alone the entire company (box above).
As per the annual returns filed by Tatra Sipox (UK) Ltd with Britain’s registrar of companies (ROC), the firm was incorporated on June 23, 1994, as “manufacturer’s agent”. Ironically, when BEML signed the MoU with Tatra Sipox (UK) in 1997, the firm was involved in the business of providing ‘spiritual, religious, social and dating services’ (table above left).
The BEML press statement further said Tatra Sipox (UK) was formed to address overseas markets, including India. But as per the official website of the British ROC, Tatra Sipox (UK) Ltd, classified as a ‘small company’ eligible for total tax exemption, has no association with any establishment in the UK, nor does it have any ‘oversees details’.
According to a former BEML employee, business worth Rs5000 crore has been transacted so far between BEML and Tatra Sipox (UK). This means the British firm has been doing Rs500 crore worth of business annually. Yet, the company has, since inception, shown an average profit of a merely Rs1 crore per annum, which is less than half a per cent of the annual turnover.
Interestingly, as per the proceedings of the 38th annual general meeting (AGM) of BEML in 2002, chaired by K Aprameyan, then chairman and managing director, Tatra Sipox (UK) Ltd is the marketing arm of a Czech company and not a Slovakian company as claimed by Natarajan in his press statement.
The minutes of the AGM noted that BEML had approached the Czech firm for supply of Tatra truck components, but the company directed BEML to Tatra Sipox (UK) Ltd, its purported marketing arm.
BEML took up the manufacture of Tatra heavy duty trucks under a licence agreement from Omnipol Foreign Trade Corporation, Czechoslovakia, in 1986. The agreement was valid till March 1997. Six years later, Czechoslovakia broke up into the Czech Republic and Slovakia.
Consequently, Omnipol could not honour the agreement and ensure supplies. In 1997, BEML entered into an agreement with Tatra Sipox (UK) Ltd for the supply of Tatra truck components.
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