The ED is investigating if Tatra sold its trucks to the army at exorbitant rates. The army has bought 7,000 Tatra trucks since 1986.
A week after the Central Bureau of Investigation (CBI) questioned Vectra chief Ravindra Rishi in connection with the alleged irregularities in the supply of Tatra trucks to the army, the Enforcement Directorate (ED) on Friday filed money laundering cases against the London-based NRI businessman and his firms as well as officials of public sector unit (PSU) Bharat Earth Movers Limited (BEML).
The ED is investigating if Tatra sold its trucks to the army at exorbitant rates. The army has bought 7,000 Tatra trucks since 1986.
Army Chief General VK Singh’s disclosure last month that he was offered a Rs14,000 crore bribe to clear substandard Tatra trucks for the forces brought the alleged irregularities in the deal in the spotlight. DNA, however, was the first to report about the irregularities in July 2011. ED officials said they would look into the alleged generation of illegal funds in the defence deal between Tatra Sipox UK and BEML.
Tatra is a vehicle manufacturer in the Czech Republic. It is owned by Vectra, a London-based company, which supplies parts to a defence-run PSU, BEML, based in Bangalore. The trucks are assembled at BEML and sold to the army.
The ED has asked Rishi to produce documents related to the Tatra Sipox UK Memorandum of Understanding with BEML inked in 1997, including details of their financial statements and tax returns. The ED will ask for similar documents from BEML and if need arises, from the defence ministry, sources said.
Sources said the CBI suspects Tatra Sipox UK and BEML in 1997 signed the truck supply deal which was in alleged violation of defence procurement rules. The rules specifically say procurement deals can be done only with the original equipment manufacturer.
The first agreement for the supply of Tatra trucks was signed with Czechoslovakia-based company Tatra in 1986. In 1997, BEML started procuring trucks through Tatra Sipox UK, claimed to be the marketing arm of Tatra, in which Rishi had a substantial stake. The CBI has alleged that since Tatra Sipox UK was not the original manufacturer of the all terrain trucks, the rule that defence procurements should be made from original manufacturer was violated.
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