Mumbai, New Delhi:
The government- run defence firm BEML, and its chairman VRS Natarajan, are spawning a series of embarrassing controversies for the government.
The Ministry of Defence has on Wednesday asked Mr Natarajan to explain why he threatened to sue former army chief General VK Singh for defamation. The ministry said that it had not authorized Mr Natarajan at any point to file a defamation suit against the General, who had said that the trucks supplied by BEML to the army are sub-standard.
There's more bad news for Mr Natarajan. An order from the Company Law Board in Chennai says that BEML (Bharat Earth Movers Ltd) and Mr Natarajan suppressed documents to disguise Mr Natarajan's mismanagement in a joint venture in the mining sector. In 2007, BEML teamed up with a private firm named Midwest Granite to form a joint venture called BEML-Midwest Ltd to explore the mining sector.
The deal - between BEML and Midwest Group - went south quickly and both companies took each other to court, accusing each other of mismanagement, misappropriation and misuse of crores of funds. The Company Law Board has asked the Centre to investigate the conduct of the joint venture and its directors - Mr Natarajan was the chairman.
The order of the Company Law Board is critical of Mr Natarajan and states "the petition before me can be treated only as an exercise to cover the failure of the Chairman to make use of that benefit. Suppression of relevant material is not expected from a government undertaking."
BEML, which is based in Bangalore, shot into national notoriety earlier this year when then army chief VK Singh said he had been offered a bribe of 14 crores to clear sub-standard trucks for the army. The Tatra trucks are manufactured by a Czech company and supplied via a London agent to BEML, which assembles them. The CBI is now investigating allegations of the bribe, as well as the alleged violation of basic rules by BEML - defence equipment has to be purchased directly from the manufacturer, a middleman cannot be involved.
In April this year, the CBI raided and interrogated Mr Natarajan in Bangalore for alleged irregularities in hiring a consultancy firm for BEML and is probing a tender awarded to Coimbatore based Astral Limited. Mr Natarajan is named as an accused in the FIR.
The legal cell of the Criminal Investigations Department in Hyderabad has also recommended that Mr Natarajan be prosecuted for cheating, criminal breach of trust, and falsification of accounts in the same joint venture case involving BEML and Midwest Granite.