The CBI has booked middleman Sanjay Bhandari along with South Korea-based Samsung Engineering Co. Limited (SECL), unknown officials of ONGC Petro additions Limited (OPaL) and others for entering into an “illegal” consultancy pact to bag a Gujarat-based project worth ₹6,744.32 crore.
Among those named as accused are Santech International FZC in the United Arab Emirates, in which Mr. Bhandari was a director; Foster Wheeler Energy Limited (FWEL)-UK; and Hong NamKoong, then senior manager with SECL.
It is alleged that in October 2007, Santech International had a consultancy agreement with SECL in violation of the conditions of a contract agreement between OPaL and SECL. He received about $50 lakh from SECL through a Dubai bank account of Santech International in June 2009.
In his income-tax returns, the accused did not disclose about the Santech International's foreign account and receipt of funds. The CBI alleged that the agreement was for inducing public servants into extending undue favours to the SECL consortium in the award of the Dual Feed Cracker Unit (DFCU) project contract in Gujarat's Dahej.
The case has been registered on the basis of a preliminary enquiry initiated by the CBI in July 2019. As it turned out, through an open global tender, FWEL was engaged as a front and technology consultant for assessing the Net Present Value (NPV) of bidders. The contract had to be awarded to the consortium with the highest NPV.
Two consortiums, Linde (Germany) and SECL; and Shaw Stone & Webster, U.S., and L&T, India, had applied. FWEL held the first consortium’s NPV as the highest.
The second consortium filed a representation, stating that it had a higher NPV. However, after review, FWEL said its calculations were correct and the tender finally went to Linde and SECL on February 10, 2009.
CAG objection
The CBI alleged that the tender document did not have any provision for advance payments. However, the OPaL board later approved it on the bidders’ request, in alleged violation of the Central Vigilance Commission guidelines. The Comptroller and Auditor General, in its 2015 report, had objected to the same while observing that there was a delay in project completion.
On receipt of the advance payment, about $50 lakh was credited to Santech International's Dubai account in June 2009, as alleged.
The CBI also found an unsigned copy of a consultancy agreement dated July 19, 2007, between FWEL and Santech International, linked to the ONGC's project in Dahej, as per which 3% of the contract value was to be paid as consultancy fee.
The FIR alleged that Mr. Bhandari acquired a London property by buying 100% shares of Vertex Management Holdings Limited-UK for 19 lakh pounds. He was the company's beneficial owner from December 2009 to November 2012. The property was sold to UAE-based Skylite Investments during 2011-2012.
Defence contracts
The role of Mr. Bhandari, who is said to be in the U.K., is also under the scanner in multiple defence contracts. In June last year, the CBI booked him and others for alleged corruption in the ₹2,895-crore deal of 75 Pilatus basic trainer aircraft for the Indian Air Force in 2009.
Last month, the Enforcement Directorate filed a charge sheet against him in a money laundering case pertaining to the London property, based on a case instituted by the Income-Tax Department under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act.
