Indian MoD Takes Action Against Denel

G6 Base Bleeding?

Back on July 6/05, DID noted that South African manufacturer Denel’s G6 self-propelled howitzer may be in trouble with respect to India’s highly coveted $2 billion order as a result of corruption investigations, and that this could have serious consequences for the firm’s financial stability. The other competitors for that contract are BAE Land and Armaments, and Israel’s Soltam.

A July 28/05 memo from India’s Ministry of Defence indicates that those fears appear to have been realized. It reads:

“Based on the information furnished by M/s Denel, South Africa, there is prima facie evidence of violation of clauses relating to use of undue influence and agents/agency commission, as contained in the contracts of Anti-Material Rifles (AMR) signed in 2002. A decision has been taken to initiate action to cancel all contracts entered into with M/s Denel. The contract signed on March 07, 2005 for procurement of 400 AMR has been cancelled. The matter was also referred to the CBI for investigation. An FIR was filed by the CBI in the matter on June 06, 2005 against inter-alia, the unknown public servants. Further appropriate action, as warranted by the report of the CBI, would be taken after the receipt of the same.

This information was given by the Defence Minister Shri Pranab Mukherjee in a written reply to Kunwar Manvendra Singh in Lok Sabha today.”