CAG had warned BEML over Tatra truck sales accounting

While a Parliamentary panel on defence said Tatra trucks met quality norms, the Comptroller and Auditor General (CAG) had reportedly warned Bharat Earth Movers Limited (BEML) about booking sales of Tatra trucks to the Indian Army even before it was approved.

According to the national auditor this meant the vehicle supplier had overstated sales by Rs 431 crore.

The CAG had first found instances of the company booking sales in advance of the Tatra trucks while examining the company’s accounts in 2010, The Economic Times reported today.

The CAG had reportedly found that the company had booked sales of Rs 185 crore for more than 300 trucks despite the approval from the Indian Army not being received. However, the company had treated the vehicles as sold for the fiscal year.

Until the approval from the Indian Army was received the sales should not have been booked, the CAG noted and said it was a violation of the company’s accounting policies.

However, according to the report, BEML repeated the act in the next financial year where it booked sales of Rs 246 crore for 306 trucks which had been sent for inspection but had not been approved by the Indian Army.

While the public sector company did not comment on the article, BEML had reportedly defended itself in its annual reports saying that it had booked the sales since it had made the delivery to the Army for inspection, as per norms.

The company had also said the vehicles offered for inspection earlier had been accepted  and there had been no history of a single vehicle being rejected over the last 25 years.  BEML incidentally is the sole supplier of the Tatra trucks to the Indian Army.

Meanwhile, Naresh Gujral, a member of the Parliamentary Panel on defence, said they had found no shortcomings with the Tatra trucks and said they would leave investigations on whether a bribe had been offered to the Army chief by the truck maker to the CBI.

“We are satisfied by and large that the quality of the trucks is ok. Now if bribes were offered and if something under the table took place then it is for the CBI to investigate,” he told CNN-IBN.

“We were concerned whether the quality of the truck was upto the mark but we have been reassured by people today that by and large the truck was up to the mark,” Gujral said.

The CBI is presently investigating allegations that Army chief General VK Singh was offered a bribe of Rs 14 crore to approve a contract for the acceptance of Tatra trucks. The Army chief had reportedly been considering alternatives since he felt the price of the truck was too high.

The Army chief had also reportedly been considering not going forward with a contract for the Tatra trucks that had been approved by his predecessor.

Chairman of the Vectra Group, Ravi Rishi, which has been involved in the sale of Tatra trucks to the Indian Army has been questioned multiple times by the CBI and yesterday officials from BEML had also been questioned.