CVC's list of 380 defence deals puts CBI in a fix

CVC's list of 380 defence deals puts CBI in a fix
RITU SARIN

NEW DELHI, MARCH 15: Defence Minister George Fernandes' announcement for having an omnibus inquiry into defence deals has sent the investigating agencies into a tailspin. Last week, the Central Bureau of Investigation (CBI) received a list of 380-odd deals which the Ministry of Defence (MoD) has signed ever since defence agents were banned in 1989.

The list was routed to the CBI by the Central Vigilance Commission (CVC) and senior officials of the two agencies are scheduled to meet next week to work out a strategy to decide which deals merit an investigation. CBI officials are in a fix over the long list and say it will be a tall order for the agency even if it is asked to investigate, say, one-tenth of these procurements.

There is more confusion in the making since a cut-off amount of Rs 75 crore for a single deal has now reportedly been set in consultation with the MoD. But this was done after the CVC had already dispatched the list of 380 deals to the CBI. MoD officials say they were proposing to withdraw the master list and will soon be sending the CVC a shorter list of procurement contracts valued above Rs 75 crore.

CVC officials point out that since a single file system existed in the MoD, they were going to be extremely cautious about calling any case for investigation. Some ground rules have already been set. For one, all audit paragraphs of the Comptroller and Auditor General (CAG) on defence procurement made during the relevant period are being examined both in the MoD and the CVC. While the MoD is going through the exercise to match the audit observations with their ``action taken'' reports, the CVC will be scrutinising CAG audits to decide which deals need to be probed.

A core group in the MoD is also assisting the CAG in getting under way a special audit on procurements made during the Kargil war, also initiated at the behest of the Defence Minister. It is not clear, however, if the CAG has already received instructions to do another special audit on defence spares, in view of the allegations made by Rajya Sabha MP Jayant Malhoutra.

Officials in the CVC and MoD say that while it was early yet to estimate how many contracts will finally be probed, all deals mentioned by Jayant Malhoutra in Parliament and by Rear Admiral S V Purohit in his petition before the Delhi High Court will be referred to the CBI in any case.

While Rear Admiral Purohit had alleged corruption in naval supplies by companies like Marlog and Makalu, Malhoutra had alleged mala fide in the proposal to purchase T-90 tanks as well as in the procurement of Bofors ammunition before the ban on the company was lifted.

Sources say that shortly after the Defence Minister made the announcement of the inquiry, Malhoutra sent a fresh sheaf of documents to the MoD as well as the CVC. Officials in the CVC say the MP's wish-list for investigations was being considered and that the MoD had already been asked for the single files on these deals. After scrutiny, the CBI will be asked to examine the files and commence preliminary inquiries.

Even as this flurry of activity and inter-departmental correspondence continues, the CVC has tried to pacify members of the the MoD's procurement wing, which feels the omnibus inquiry might delay procurements for which negotiations were on. A senior CVC official has recently written to the MoD stating that the probe ordered by the Defence Minister should not come in the way of the current procurements or affect the country's defence preparedness.