WHEN VECTRA Limited Chairman Ravi Rishi landed in Delhi for the Defence Expo in the last week of March, he had no idea what the week had in store for him. The Tatra controversy, which had been simmering for almost close to seven years, reached a boiling point after COAS VK Singh, in an interview to the The Hindu, made the shocking allegation that he was offered a bribe of Rs 14 crore to clear a tranche of 788 trucks for the Indian Army.
The chairman of the UK-based $800 million Vectra Group is currently named in an FIR lodged by the CBI to probe the BEML-Vectra Sipox deal to supply Tatra trucks to the Indian Army from 1997 onwards. The allegation is that the trucks supplied to the Army violated defence procurement rules, according to which the purchase of defence items has to be made from an Original Equipment Manufacturer (OEM) and not a middle player. The FIR also alleges irregularity in the pricing of the trucks, a three-fold increase from procurement at the source to their delivery.
Rishi’s London-based Vectra Sipox owns 100 percent of Tatra Slovakia and close to 66 percent of Tatra Czech
How does the man in question, who has been interrogated five times in the past week by the CBI, react to the charges levelled against him? Does he know Lt General Tejinder Singh, former Director General, Defence Intelligence Agency (DGDIA) who allegedly offered the bribe on behalf of Tatra to the army chief?
“You will be surprised to know that I have absolutely no idea who Tejinder Singh is. I have never met him,” says Rishi. “I feel the chief has some ulterior motive. I told a news channel that he is suffering from male menopause syndrome.”
Incidentally, Rishi is from Rohtak in Haryana, not far from Bhivani, VK Singh’s ancestral town. Born to a business family, Rishi harboured lofty ambitions of his own. His father was a civil contractor. He went to IIT Delhi after passing out of Delhi Public School, Mathura Road. After graduation, he dabbled in selling electrical goods and consumer electronic products in Hong Kong. “I have always been known as a trader in East Europe. I shifted to London in 1985,” he says.
The Tatra Files
Deconstructing the vehicle in the eye of the storm
Defence PSU Bharat Earth Movers Limited (BEML) tied up with Czech firm Omnipol in 1986 and then Tatra Sipox UK in 1997 to procure the trucks
Tatra Sipox UK is a London-based trading company and not the original manufacturer. This violates the first rule of procurement, which says you must buy from the manufacturer. At the time of signing the MoU, Sipox was registered as a company providing spiritual, religious and social services. The holding pattern then further changed, and BEML signed a joint venture between Tatra and Vectra. Both firms have Ravi Rishi as a major shareholder
BEML signed another 10-year agreement with Tatra Sipox (UK) in 2003, four years before the first agreement ended. Successive army chiefs cleared the purchase of subsequent tranches of Tatra vehicles
In February 2010, General Deepak Kapoor signed a fresh procurement request, later turned down by General Singh after he was allegedly offered a bribe by Lt Gen Tejinder Singh
A Tatra truck that costs Rs 40 lakhs was sold to the Army for Rs 1.10 crore, leading to a loss of Rs 750 crore to the exchequer
General VK Singh wanted to open up the bidding process to include Ural India, another manufacturer of defence vehicles, to get the truck at a cheaper cost. DRDO chief VK Saraswat countered Singh’s claim saying that there was nothing substandard about the vehicles used as base for launching missiles like Prithvi and Agni
BEML chief VRS Natarajan has also denied any wrongdoing on the company’s part or that of the original equipment manufacturer (OEM) in the sale and delivery of Tatras to the armed forces. The PSU paid a substantial amount in advance for the order of 788 trucks
Rishi got into the truck business in 1993, the year erstwhile Czechoslovakia broke into the Czech and Slovak Republics. Vectra Limited owns 100 percent of Tatra Slovakia and close to 66 percent of Tatra Czech, and has an agreement to supply the trucks to BEML through its London-based holding company Vectra Sipox.
When allegations of exorbitant pricing of the trucks are brought up, Rishi avers confidently: “There are two things. First, did we ever say that Tatra came cheap? If you want Shiny Red apples, you cough up money for Shiny Reds, and not grapes. You want cheap trucks, lower your requirements and specifications. If you want to fire Brahmos from a bullock cart, be my guest. Today, I supply BEML with 40 percent built trucks and they retro-fit the remaining 60 percent. I don’t know at what price the BEML sells it to the Indian Army or to the ministry. Neither I, nor my people have ever been present in any of the meetings in South block,” he adds. The General has alleged that the trucks were purchased for cheap and then sold to the Indian Army at an overpriced rate.
WITH THE CBI still on the case, Rajan Mukherjee, GM of the West Bengal-based Ural India, an Indo-Russian joint collaboration that makes trucks similar to the Tatra, made another allegation in an English daily. Mukherjee claimed that VK Singh, as head of the Eastern Command, had asked Ural to provide trucks for testing in 2008. The newspaper quotes Mukherjee as saying that this was after the Tatra trucks “miserably failed 17 Mountain Division in performing Quick Reaction Team and Reconnaissance duties in the high altitude ranges of northern Sikkim. During the trials, the Tatra vehicles developed defects in engine assembly, whereas Ural’s engine performance was satisfactory even after running about 600 km at high altitude,” claimed the article. This seems contrary to BEML Chairman VRS Natarajan’s claims, who’d said earlier that the Ural trucks were outperformed by the Tatras in the trials.
“Also, you forget that this (Ural) is a competitor’s claim , one that has no official backing. The ministry hasn’t said this,” adds Rishi. “This trial was never even put on record. Trials are always held by Weapons and Equipment Division (WED) and the technical manager. As it turns out, there are different procedures for trials and induction of new equipment. There was no reason to take Ural into trials and as chief of Eastern Command, Singh had no authority to do so. Proper Procedure was not followed.”
The Indian Army officially refused to comment on this development.
Rishi too maintained silence over Singh’s allegation of a bribe in return for his nod for a fresh tranche of Tatra vehicles. The CBI is yet to file a preliminary inquiry into Singh’s charges and is waiting for a detailed complaint. The COAS has written to the agency seeking more time to file.
Rishi claims he is not aware of the pricing mechanism followed by BEML, which supplies his trucks to the army
Meanwhile, a case has been registered against Rishi, unknown officials of BEML and the Defence Ministry in the BEML-Vectra Sipox deal. The CBI has impounded Rishi’s passport till the investigation is complete. Sources in the CBI say apart from scrutinising the papers seized during the raids at Delhi, Noida and Bengaluru, Vectra has been asked to provide all documents related to the deal. The CBI has written to the defence ministry for its sanction to initiate probe against Natarajan. Natarajan has been accused of receiving favours from Vectra. Also awaited are official documents from the ministry, which will shed crucial light on the deal-making process and how prices were arrived at. The CBI is hopeful that Natarajan’s interrogation will help the investigation move at fair clip.
The Tatra may be a good truck, but what the investigators need to find out is if any kickback was paid to bag such a huge contract. Or why it suddenly fell foul of the Army chief.
Brijesh Pandey is a Special Correspondent with Tehelka.