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BEML spurned Tatra offer of direct deal,went through agent: probe

The meeting,the files show,was held on Jan 19,1994,at the BEML headquarters in Bangalore

Written by Ritu Sarin
New Delhi | July 3, 2012 2:39:34 am

Investigations probing the alleged scam in the procurement of Tatra trucks for the Indian Army have apparently found that Bharat Earth Movers Ltd (BEML) could have sourced the trucks directly from the Czech company for a lower price way back in 1994 without going through its British agent Tatra Sipox owned by NRI businessman Ravi Rishi.

Rishi and suspended BEML chairman V R S Natarajan have maintained that the only way the trucks could be procured after Tatra split into Czech and Slovakian divisions was through a 1997 agreement between BEML and Tatra Sipox,CBI officials said.

However,files recovered by the CBI from BEML and the Ministry of Defence show that Tatra had in 1994 offered to directly sell the trucks to the PSU under the condition that BEML keep Omnipol Foreign Trade Corporation,a Czech state firm with whom BEML had an agreement,out of the picture. Tatra also offered an attractive 40 per cent discount on supplies of the trucks and spares. The deal included transfer of technology which would allow BEML to indigenise the vehicles.

The meeting,the files show,was held on January 19,1994,at the BEML headquarters in Bangalore and Tatra was represented by its senior executives Herbert Ernst Kempe and Miroslav Vystavel. The minutes of this meeting also show that Rishi was present during the discussions although it is not clear in what capacity.

Besides the condition on Omnipol,Tatra also wanted BEML to not compete with it to supply trucks to the United Arab Emirates. While BEML and Tatra did not go on to clinch their deal in 1994,Tatra eventually cornered the $180 million order to supply 1,100 trucks to the UAE Army.

“The Tatra executives suggested a termination of the existing agreement between BEML and Omnipol and proposed an agreement with BEML and M/s Tatra provided BEML do not compete with Tatra at UAE for exports (sic). The territory for the sale of vehicles will be the same as (in) the present agreement,” the file notings read.

For reasons the investigators are still trying to establish,BEML did not take the Tatra offer. Instead,BEML entered into an agreement in 1997 with Tatra Sipox,describing it as a “fully-owned subsidiary” of the parent company. Rishi,during his questioning by CBI officials,is believed to have told them that he got a 30 per cent discount from Tatra for supplying trucks to BEML and passed on half of that to the Indian PSU.

Besides,officials handling the case point out that Tatra’s condition that BEML stay away from the UAE Army deal shows that Tatra was,way back in 1994,confident that BEML could go on to produce the same trucks and compete with the original manufacturer. This,they said,also raises questions about why BEML went on to import 5,000 more trucks through Tatra Sipox under subsequent agreements.

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