Inquiry into Indian defence bribe over US$1bn lorries deal

India's enforcement directorate has formally announced an inquiry into allegations that Ravinder Rish, an Indian-British businessman, laundered illegal funds generated from an overpriced lorry contract.

NEW DELHI // Indian authorities are investigating whether an Indian-British businessman bribed Indian defence department officials and overcharged for a US$1 billion (Dh3.67bn) contract to supply all-terrain military lorries to the army.

India's enforcement directorate has formally announced an inquiry into allegations that Ravinder Rishi, the businessman, laundered the illegal funds generated from the overpriced lorry contract.

The deal for the 5,000 lorries, to be delivered in instalments over a period of 10 years, is said to have priced the vehicles at three times their unit cost of US$78,000.

"There have been large amounts of corruption" in the defence department, said Bharat Verma, a former cavalry captain who now edits the Indian Defence Review."This is not a one-off. There will be some more."

The lorry scandal comes on the heels of several other corruption controversies to rock the Indian government, most notably the 2g telecommunications scam, in which mobile telephone spectrum was underpriced and sold to select companies.

Mr Rishi's $800 million Vectra Group, based in London and operating in the aviation, engineering, materials handling and construction sectors, has denied any wrongdoing.

The investigation was set into motion when the armed forces chief, General V K Singh, said in an interview with The Hindu newspaper he was offered $2.7 million to approve a particular tranche of 600 outdated Tatra lorries.

The bribe offer, he said, was made in September 2010. In his subsequent formal complaint, filed last week, Gen Singh named a retired lieutenant-general, Tejinder Singh, who had acted as a middleman on behalf of Mr Rishi and who had offered Gen Singh the bribe.

Gen Singh was the protagonist in a recent army-government dispute involving the exact year of his birth, a dispute over which he sued the government in the Supreme court in February.

Gen Singh contended that he was born in 1951, and that he had a year to go before retiring. the government argued that, according to its records, he was born in 1950 and was due to retire this May.

In mid-february, a two-judge bench of the supreme court said that it would refuse to intervene and settle the matter of Gen Singh's year of birth, which handed a de facto victory to the government.

Anectodal evidence shows the revered status of India's armed forces has been tarnished by these scandals.

One major, speaking to The National from Kolkata and asking to remain anonymous, said soldiers had "started to feel disillusioned about the fact that, every day, some bad news or the other is coming out about the army".

"When a soldier returns to his village now, he gets asked: 'Is this kind of thing happening even in the army?' "

Within the forces, the major said, one popular view was Gen Singh was trying to "get back at the government" after he was overruled on the issue of his age.

"He timed his revelation [about the bribe] in a way that was advantageous to him," he said. "He could have acted earlier, or he could have called for better tenders [for supplying lorries] even back then."

These events may have also damaged ties between the defence ministry and the army, as a story by the Indian Express newspaper said this month.

On April 4, the newspaper ran a front-page story about how, in January, when relations between the government and the army chief had deteriorated, the movements of two army units in New Delhi had unsettled the civilian defence authorities.

This prompted a swift order from the defence minister for the troops to return to barracks immediately.

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