The former Army Chief had alleged irregularities in sourcing of Tatra trucks by the firm

Chairman and Managing Director of Bharat Earth Movers Ltd. (BEML) V.R.S. Natarajan said on Friday that the company had issued a notice of defamation to the former Army Chief, General V.K. Singh, for having made “false and motivated charges” against the public sector defence firm.

Addressing a media conference, which was primarily convened to announce the BEML's financial results, Mr. Natarajan said he was “appearing for the second and final time” to deny the charges levelled against the BEML. General Singh, who stepped down on Thursday, had alleged irregularities in the sourcing of Tatra trucks by the BEML.

“We have requested the former Army Chief to apologise or express regret for the derogatory and defamatory remarks he has made,” Mr. Natarajan said. “If that does not happen, we may perhaps consider filing a suit for defamation,” he said.

“The charges levelled by V.K. Singh are absolutely false [and] motivated,” Mr. Natarajan said.

“This is borne out by the fact that not a single letter has been received by either the BEML or the Ministry [of Defence] that the vehicles [Tatra] are substandard, obsolete or overpriced,” Mr. Natarajan said.

The BEML chairman said the Army had purchased 556 Tatra vehicles (model 815) for $113 million. At the then prevailing exchange rate the cost per truck worked out to Rs. 0.97 crore. He claimed that the current cost, accounting for the change in the value of the Czech Korun and the Euro, works out to about Rs. 1.57 crore per truck — an increase of 62 per cent in five years. “But the great Mr. V.K. Singh, who held the position of the Chief of Army Staff, made a shocking and false statement that the truck is available for Rs. 28 lakh in the Czech Republic.”

Referring to the recent interview by General Singh to Times Now, Mr. Natarajan said the former Army Chief had called for an investigation into “anything that has to do with the BEML.”

He said the BEML was a diversified company with interests ranging from dredging to aerospace with a customer base in 155 countries. He alleged that General Singh's statement was “defamatory and damaging” to the reputation of the company. “Such a statement is not expected from a man of his stature.”

He also challenged the Army Chief's allegation that the Army Recovery Vehicle (ARV) supplied by Bumar, a Polish company in collaboration with the BEML, was “the most useless vehicle given to the Army.”

The BEML Chairman also countered the allegation that the company had supplied spare parts at inflated rates, of up to 5,000 per cent. Between 2006-07 and 2011-12, the company had supplied 133 parts and their total value was just over Rs. 10 crore. Mr. Natarajan said the margins in these sales ranged from -76 per cent to 143 per cent, but the average margin for the company was only 16.79 per cent.

“Third rate news”

He urged news establishments to check with the company before publishing “third rate news.” He also described a former employee who had been a whistleblower as a “joker.”

Asked why he chose to wait for so long to counter General Singh's allegations, the BEML Chairman said the public sector company had to get the requisite clearances from the Defence Ministry before launching legal proceedings.

Asked why the BEML chose to deal with a third party instead of dealing with the Original Equipment Manufacturer (OEM) for sourcing the Tatra truck, as prescribed by the Defence Ministry, Mr. Natarajan argued that the rules apply only to the Defence Ministry, MoD services and the Coast Guard, not to undertakings such as the BEML. Entities like the BEML were free to source equipment from the OEM or even through “authorised agents” as long as they satisfy the terms of the tender. “Moreover, my [BEML's] purchase manual does not say that we must only work with OEMs,” he said.

First agreement

The BEML Chairman pointed out that the first agreement for the Tatra trucks, signed in 1986, was not with the OEM manufacturer then located in the former Czechoslovakia but was signed with an export promotion corporation. Subsequently, after the break-up of the country in 1993, the Slovak half of Tatra was bought by Sipox, U.K., which established a marketing company to sell the trucks. Mr. Natarajan admitted that in the wake of the many controversies over the sourcing arrangement, the BEML did try to persuade the Slovak company to source directly in 2010, but was asked by the manufacturer to deal with its marketing arm. He alleged that a corporate group was behind the allegations against BEML. “Find out which group is behind it,” he said.

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