Czech truck-maker Tatra a.s. risks getting blacklisted from doing business in India following allegations made by the Indian Army chief, General V.K. Singh, that a former army officer, claiming to represent Tatra’s Indian representative, had offered him a INR140,000,000(US$2.8 million) to clear an order for 600 Tatra trucks. Based on the general’s complaint, India’s Central Bureau of Investigation (CBI), has launched an investigation into the bribery affair.
The CBI investigation has to only prove that the bribe had been offered, not exchanged hands. In recent weeks, the Indian MoD has blacklisted Rheinmetall, Israeli Military Industries, Singapore Technologies and a couple of Indian companies on mere suspicion that these firms had offered bribes- again on the basis of a CBI investigation.
Tatra operates in India through its representative Vectra Limited, which is a London-based investment company. According to information posted on the Vectra website, it is the single largest shareholder in Tatra Holding s.r.o. that owns Tatra a.s. Vectra Limited is reported to be owned by London-based Indian businessman, Ravinder Rishi through complex cross-holdings.
Since 1986, the India Army has acquired 7,000 Tatra trucks from Tatra Sipox (UK) Ltd, all of which were assembled by Indian government-owned company, BEML which is based in Bangalore. Investigators allege a nexus between BEML and Tatra Sipox to import sub-standard and overpriced trucks into India. Mr. Ravinder Rishi and Vectra group companies are reportedly being investigated formoney laundering by the Enforcement Directorate (ED), a financial investigation agency in India, to probe alleged generation of illegal funds in the deal between Tatra Sipox UK and BEML to supply trucks to the Indian army. Reports in the Indian media said, the agency has registered the case after gathering initial details of the probe from the CBI.
The ED is probing if the Tatra trucks deal had ‘off the book’ or overpriced transactions leading to generation of illegal funds which could have been subsequently laundered in other investment avenues. The ED and CBI are investigating whether Tatra Sipox UK signed the truck supply deal with BEML which was in alleged violation of defence procurement rules which say that procurement should be done directly from original equipment manufacturer only.