Blacklisted Israeli defence firm to face action soon: Antony

Last Updated: Wed, Feb 23, 2011 14:50 hrs

New Delhi, Feb 23 (IANS) The government will soon decide on penal action against an Israeli defence company blacklisted in connection with a graft case filed by the CBI against a former Ordnance Factory Board (OFB) chief, the Rajya Sabha was informed Wednesday.

The Central Bureau of Investigation (CBI) filed the case against Sudipto Ghosh, former director general of OFB, in May 2009.

Defence Minister A.K. Antony, in a written reply, said his ministry has issued show cause notices to Israeli Military Industries (IMI) last year, following which the company requested for supporting documents on the charges against it.

The ministry provided the firm with documents and materials.

'A decision regarding the penal action will be taken after examining the reply of IMI and in consultation with the ministry of law and justice and the Central Vigilance Commission,' Antony said.

After examining the first information report (FIR) lodged by the CBI against Ghosh, the defence ministry, through an order May 28, 2009, decided to put on hold all contracts with companies named by the investigating agency in the graft case.

IMI, one of the six companies under the CBI scanner, was to set up ordnance factories near Nalanda in Bihar for manufacturing bi-modular charges for the Bofors artillery guns of the army under a Rs.12 billion (about $260 million) contract.

The ministry's order stopping implementation of the contract was contested by the defence firms in the Delhi High Court, which set it aside and directed the ministry that penal action against the companies could be taken only after following principles of natural justice.

Accordingly, the ministry issued show cause notices to all the companies on the basis of the CBI's FIR. The firms denied the allegations and sought specific evidence based on which penal action was proposed against them.

The CBI filed a charge sheet in the case against Ghosh in June 2010 and also recommended the blacklisting of IMI, along with five other companies of both Indian and foreign origin, for being involved in corruption.

Following the charge sheet, fresh notices were issued to IMI, Antony added.