St Antony needs to answer tough questions on Tatra

It’s not about the general anymore. While we can keep raising questions about how well – or how badly – General VK Singh handled the age controversy or the recent charge of bribery he levelled against another former general, there is now no doubt he has brought real issues to the fore.

In fact, the spotlight needs to shift back to St Antony, who has so far been happy to imply that he didn’t do anything about the bribery case since the general did not give it in writing.

But Friday’s revelations in Firstpost, based on an April 2011 story in about Tatra, which was put out two days back by, shows that the Tatra deal may have been hijacked by Ravinder Kumar Rishi’s UK-based Vectra Group to the detriment of both the Indian army and the Czech firm concerned. An IIT-Delhi alumnus, Rishi is a British passport holder.

According to Business Standard, Ravi Rishi’s Vectra Group is, in fact, the largest shareholder in Tatra Holdings, which owns Czech truck manufacturer Tatra. The question is: if he owns Tatra, why does he need to route the deal through a middleman company also owned by him? (For more on Ravi Rishi, read this story)

The spotlight needs to shift back to St Antony, who has so far been happy to imply that he didn’t do anything about the bribery case since the general did not give it in writing. PTI

Like Bofors, the Tatra deal may not be about buying something sub-standard (the Bofors gun did well in the Kargil war), but about the purchase decision being used by unscrupulous elements in the government and bureaucracy to favour Vectra – which seems to have cornered the lion’s share of the margins in the deal in its UK-based company Tatra Sipox. India might well have overpaid for the trucks.

The reason why AK Antony – St Antony to well-wishers, in view of his incorruptibility – needs to be put in the dock is this: the Tatra deal was not one between the Czech manufacturer and India, but routed through Tatra Sipox (UK), which is part-owned by Rishi’s Vectra group. Tatra Sipox buys the trucks in knocked-down condition from the original manufacturer and then hands them over to BEML, the Indian defence production company, possibly at inflated prices.

From Rajiv Gandhi’s days – when he famously claimed there were no middlemen in the Bofors deal, only to be proved wrong completely – Indian defence contracts are supposed to be direct deals between supplier and India. The Tatra-BEML deal, which involves technology transfer, clearly violates this rule.

Why does Tatra Czech allow Ravi Rishi to do this? There could to be two reasons why: one is that Rishi is on the Tatra Czech board. In fact, the complaint against him reported by says he used his privileged position on the Tatra board to get the right price deal. The other can only be conjectured: why would the Tatra board allow him to do that unless there is a benefit to them as well?

The story published by quotes Tatra’s CEO Ronald Adams as telling a Czech daily that the management went for the deal because it came as a godsend when the company was down and out. “It’s the Indian deliveries which helped keep production going and cover Tatra’s basic fixed costs,” he is said to have observed.

Does this imply that Rishi used his special knowledge of Tatra’s financial condition – struggling to survive then – to extract low prices from the manufacturer, and then used his connections in India to get an even better deal from this country?  The profits were captured in the UK company Tatra Sipox.

Only the Central Bureau of Investigation (CBI), which is conducting an inquiry into the general allegations, can find the real answers. It is believed to have called Rishi for questioning, but the scam obviously has two ends to it – one at the Czech end and another in India.

When Gen Singh reportedly told Antony about the Rs 14 crore bribe offer, the latter – according to both the general and the minister – put his head in his hands.

The problem is: was this enough? Should the defence minister of a country with the biggest arms import budget in the world be allowed the luxury of just putting his head in his hands and do nothing else about it?

At a time when every rupee that goes to defence – Rs 1,93,000 crore in the latest budget - comes at the cost of feeding the poor or some other worthy national objective, isn’t it Antony’s job to see that the armed forces get the biggest bang for the buck?

Or is the system so ridden with corruption that everyone knows that the idea is to get the biggest (illegal) buck for any bang – big or small.

Here are a few questions for St Antony to ponder over:

• Why was the procurement guideline on keeping middlemen out flouted so openly? It didn’t, after all, need a genius to figure out that Tatra Sipox, in which Rishi had a stake, was a middleman and not the manufacturer.

• Given the story on losses to Tatra from the deal, it again takes no genius to figure out what prices we paid for the truck and what Tatra received for them. This gap – or a substantial part of it - should be treated as commissions paid to middlemen. Why wasn’t this done?

• Ravinder Rishi, who has denied that any bribe could have been offered to Gen Singh since the deal is directly with BEML, is currently in India to attend the defence exhibition (Defexpo). Quite clearly, if Rishi can officially participate in a defence expo – which requires an elaborate registration process and police verficiation – the ministry cannot claim to know little about him. Why didn’t St Antony’s ministry take a closer look at Rishi’s antecedents since Gen Singh had disclosed the bribery incident in 2010?

Isn’t it time St Antony stopped pretending to be surprised by the general’s allegations and start getting to the bottom of the Tatra scam.

Ravi Rishi, incidentally, has many Indian ventures and an India-listed company, Global Vectra Helicorp, which is quoted on the National Stock Exchange. Its website claims Global Vectra is “India’s largest private helicopter company, with a fleet of 23 aircraft” and it serves the offshore sector.

Updated Date: Mar 31, 2012 10:58 AM

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