New details emerge on Tatra truck deal

NEW DELHI, April 2, 2012

http://www.thehindu.com/news/national/article3274112.ece?homepage=true

Even as Central Bureau of Investigation detectives have begun questioning Ravi Rishi, the London-based millionaire businessman at the heart of the showdown between the Defence Ministry and Chief of the Army Staff V.K. Singh, fresh details have begun to emerge of the truck deal that precipitated the crisis.

Rajan Mukherjee, the general manager of West Bengal-based Ural India, has told The Hindu that General Singh — then General Officer-Commanding of the Eastern Command — had requested the firm to provide trucks for testing in 2008, after Tatra trucks sold by Mr. Rishi's firm “miserably failed 17 Mountain for performing Quick Reaction Team and reconnaissance duties in [the] super-high altitude areas of northern Sikkim.”

“Defects”

“During the trials,” Mr. Mukherjee said in an e-mail to The Hindu, “the Tatra vehicle developed defects in engine assembly, whereas Ural's engine performance was satisfactory even after running about 600 km at high altitude.”

Mr. Rishi owns Vectra, a conglomerate which has a controlling stake in Czech and Slovak-based specialist truck firm Tatra, which has supplied the Indian Army since 1986.

Rashi Verma, a Joint Secretary at the Defence Ministry, had said last week that the government had “never received any complaint from the armed forces” — a statement which suggests the Eastern Command either chose not to pass on its problems with the Tatra to the army headquarters in New Delhi, or that its reports were suppressed by higher authorities.

In an exclusive interview to The Hindu published on March 26, General Singh had said he was offered a Rs. 14-crore bribe, which, it emerged, was linked to an officer allegedly representing Tatra to clear a consignment of 600 trucks.

There is no information available so far if Ural India's trucks were the sole platform tested by the Eastern Command in Northern Sikkim and if so, why. Ural is co-owned by Kolkata-based magnate J.K. Saraf, who knew Gen. Singh during his tenure as Eastern Army Commander. There is no allegation, however, of the relationship having caused improper influence to be exercised.

Mr. Mukherjee's claims, however, stand in stark contrast to earlier statements by VRS Natarajan, the head of public-sector giant BEML, which co-manufactures Tatra trucks in India. Mr. Natarajan claimed that Ural India's trucks had been knocked out of competition in the ongoing trials, a claim Mr. Mukherjee has denied in his e-mail to The Hindu, adding that his firm is considering “appropriate action.”

The BEML chief, however, has since been backed by Defence Research and Development Organisation chief V.K. Saraswat, who said Tatra trucks were “outstanding.” Both BEML and Tatra have said they are considering legal action against General Singh, but provided no details of their course of action.

Army sources said the problem encountered in Sikkim could have been related to the Tatra truck's engine, which is designed for rugged battlefield use, compromising high-altitude performance in return for lower risks of breakdown.

CBI officials refused comment on the issues they had discussed with Mr. Rishi, but the businessman has been barred from leaving India until further notice.

He was earlier questioned by the agency officials last week, soon after the CBI registered an FIR in the case. CBI officials were also poring over and analysing a number of documents seized during raids in Delhi, Noida and Bangalore.

Apart from Mr. Rishi, the FIR refers to unknown officials of BEML, Vectra and the Army. The case was registered under provisions of the Indian Penal Code relating to criminal conspiracy to cheat and under the Prevention of Corruption Act.

The investigators are tasked with looking into all purchases of Tatra trucks made from 1997, when Vectra took control of Tatra. Since 1986, the Army has purchased some 7,000 Tatra trucks to transport troops and artillery.