Court accepts CBI closure report in Op Westend graft case

PTI

New Delhi, 04 Sep 2011:  A Delhi court has accepted a CBI plea to close a corruption case against an aide of former defence minister George Fernandes and others for alleged delivery of kickbacks by an Israeli firm to an Indian arms broker for securing an army contract.

 

Allowing the closure of the case against Fernandes’ erstwhile Samata Party’s national treasurer R K Jain and some unknown Defence Ministry and army officials, special CBI judge Talwant Singh, however, asked Enforcement Directorate to probe the alleged receipt of commission by Indian arms dealer Sudhir Choudhrie from Israeli firm M/s Soltam.

 

The case had been registered on the basis of news portal tehelka.com’s 2001 sting Operation Westend, which had purportedly caught Jain on camera speaking about his role along with that of Choudhrie in helping Soltam secure the contract from army in March 2000 to upgrade its 130mm field guns for a USD 1,56,940 kickback.

 

"I have gone through the statement of witnesses and documents collected during investigation. On the basis of above, I am in agreement with the CBI that no malafide can be attributed to any official of the army headquarters or the Ministry of Defence on basis of evidence collected during investigation and accordingly no case is made out under provisions of the Prevention of Corruption Act," the court said.

 

"Hence closure report is accepted," the CBI judge added.

 

In its closure report, the CBI also gave a clean chit to Choudhrie.The court, however, favoured further probe by ED to verify if any commission had been accepted by Choudhrie from the Israeli firm.

 

"In my view, the issue falls under the jurisdiction of the ED. Let an inquiry be conducted by ED on issue of receipt of commission by Sudhir Choudhrie," the judge said.

 

The CBI had registered a case in July 2004 against Jain, director of Magnum International Trading Co. Ltd (MITCO) and alleged middleman Choudhrie and unknown public servants of MoD and army for cheating and corruption by entering into criminal conspiracy to award the contract for up-gunning of 130 mm field guns to 155mm by importing 185 kits costing Rs 208.15 crore to Soltam Ltd.

 

There were allegations that an unsolicited offer from Soltam was considered by MoD and army without any proper trials and procedures and that proposals from all other foreign vendors were not considered to favour the Israeli firm with payment of commission to agents for the same.

 

The CBI, however, in its closure report has said during the investigation it was found that there was no major alternative before the defence authorities and hence M/s Soltam’s offer was accepted as it also coincided urgent requirements of tank.

 

The probe agency has also said that all technical trials for firing, accuracy and others to check the compatibility of 155mm Bofors ammunition of the modified 130 mm field guns were conducted and its compatibility was confirmed.The CBI also said that no information on objections being raised by other wings of the army and experts was suppressed and all the opinions on modification of the field guns were considered.

 

The agency noted that its investigation could not corroborate the allegation that other foreign vendors were not considered and a deliberate single vendor situation was created to award the contract to Soltam without ensuring price competitiveness.

 

On the allegation that there were payments of commission to agents or middlemen as revealed in conversation in Tehelka tapes, the CBI said the Israeli firm and its general manager for 1992-99, Yosef Anglister, have denied appointing any agent to assist in the matter of import of field guns and that there was no question of payment of any commission.

 

The CBI probe revealed that after the signing of the contract in 2000, MITCO received about Rs 67.48 lakh in its bank account from M/s Soltam.

 

It was shown as payments in pursuance of an agreement reached in London in June 1999 by which MITCO was appointed the representative of the Israeli firm for their products of "electrical and non-electrical stainless steel kitchen utensils". The same agreement was terminated by M/s Soltam in August 2001.