The Central Bureau of Investigation has strong reasons to suspect that Bharat Earth Movers Limited (BEML), through a memorandum of understanding with the Ravi Rishi-owned British company Tatra Sipox U.K., during the tenure of the suspended BEML chief V. R. S. Natarajan, allegedly partially surrendered the manufacturing rights of all-terrain Tatra trucks in 2003. The agency might now seek the opinion of the authorities concerned to verify the suspicion.
Investigations into the alleged irregularities in the supply of the trucks through BEML to the Indian Army have so far revealed that based on the 1986 and 1997 agreements with the manufacturers, BEML had gained exclusive rights to manufacture the trucks in India. However, through an MoU with Tatra Sipox U.K. in February 2003, it is alleged that the manufacturing rights were partially surrendered by excluding the axle part of the truck.
The CBI probe has revealed that the public sector unit had in 1986 entered into an agreement with Tatra of the erstwhile Czechoslovakia for supply of Tatra T815 trucks. Simultaneously, under the agreement, documents on technological know-how pertaining to the manufacturing of the trucks were also bought for Rs. three crore. It was agreed that BEML would progressively indigenise the trucks and the target was fixed at 85 per cent indigenisation by 1991.
However, when Czechoslovakia split into the Czech Republic and Slovakia in 1993, the manufacturing company also split into two. While the one manufacturing 70 per cent of the product was renamed as Tatra AS, the other was called Vab Sipox. According to agency sources, investigations revealed that Vab Sipox was gradually privatised and 80 per cent of the company was taken over by Josef Majsky, who allegedly had prior business links with Ravi Rishi.
During the turbulent phase, the supply of trucks was hit, and subsequently Ravi Rishi’s Venus Projects bagged one order of 100 trucks from BEML. It is alleged that Venus was awarded the contract despite the fact that it was neither a manufacturer nor its subsidiary, but a marketing company. In 1994, CBI probe revealed that Venus and Tatra Sipox allegedly came together to set up Tatra Sipox U.K. through a 50-50 partnership. Later, the company was allegedly taken over by Mr. Rishi.
The Slovak-based company, which earlier manufactured the truck axle and backbone tube part, during the correspondences with BEML, allegedly started exerting that BEML could not manufacture the axle as it was a patented product and thus had to be imported.
The agency has found that the agreement for supply of the truck components that was renewed in 1997 reinforced the exclusive manufacturing rights of BEML in India. Also, it allegedly mentioned that the technological know-how documents had been transferred to BEML.
However, soon after Mr. Natarajan took over as BEML chief, the PSU entered into an MoU with Tatra Sipox U.K. allegedly excluding the rights to manufacture the truck axle, thus partially surrendering the manufacturing rights. “The BEML was supposed to import only the components and manufacture the trucks on its own,” said a CBI source.
Investigations have also revealed that BEML had also developed a prototype of the Tatra truck axle, but it was not allowed to further develop it and was allegedly forced to import the axle, causing huge losses to the exchequer. Interestingly, agency sources said the then Secretary Defence Production had then raised objections asking cancellation of the 2003 MoU. However, the objections were ignored.
On the issue of the alleged surrendering of manufacturing rights, BEML Chief of Public Relations B. S. Sridhar said over the phone that he did not know anything about it. Several attempts to contact Mr. Natarajan also did not elicit any response.