In a first, India Govt penalises Israeli defence firm for graft

New Delhi, Apr 17 (PTI) In a first, India has seized a bank guarantee worth Rupees 2.24 billion (about USD 44 million) furnished by an Israeli defence vendor for breach of integrity pact after the company was blacklisted for alleged involvement in graft cases related to ordnance factories. Defence Minister A K Antony was apprised of the development Monday during a meeting to review the performance of the country's Ordnance Factory Board (OFB) here. "It is the first case in which the integrity pact was brought in vogue and the bank guarantee given by the Israeli Military Industry (IMI) was encashed for their involvement in corruption related cases. The bank guarantee amounting to Rs 224 crore has been encashed by the OFB," Defence Ministry officials said. The integrity pact for the foreign vendors bars them from indulging in any corrupt activity ranging from hiring middlemen or influencing government officials and processes. IMI was blacklisted by the Defence Ministry last month along with three other foreign firms and two Indian companies following action against former Director General of Ordnance Factories (DGOF) Sudipta Ghosh, who was chargesheeted by India's Central Bureau of Investigation for his alleged role in defence scams. Chairing the meeting, Antony announced a massive modernisation plan for the OFB worth Rs 150.0 billion (about USD 2.94 billion) during the country's 12th five year plan (2012-17) period. Reiterating the need for transparency and probity in the functioning of OFB, he emphasised the need for their modernisation as well. "The officers who are honest have nothing to fear, they will get full support of the Ministry," he told the OFB members. Along with the OFB officials, the meeting was attended by Secretary Defence Production Sekhar Agarwal and other senior officials in the Defence Ministry. In the last fiscal of 2011-12, the OFB achieved a turnover of Rs 123.90 billion (about USD 2.43 billion) marking an increase of 10.48 per cent against the turnover of Rs 112.15 billion (about USD 2.2 billion) in 2010-11. PTI