Home > Indian Scams > Tatra Truck Scam

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The State Bank of Saurashtra scam is a seven month old scam which happened in the year 2008. State bank of Saurashtra was one of the connect bank of the SBI. It was in the year 1902 that the State bank of Saurashtra was started as Bhavnagar Darbar Bank. Bhavnnagar is one of the sovereign entity or princely states of the Saurashtra region of Gujarat. The requirement for a state owned bank was felt during the period of Independence when the princely states were all de-segregated to form the state of Saurashtra. It was then that the State Bank of Saurashtra got its shape from the statutory corporation of the Bhavnagar Darbar. Four other Darbar banks were merged into the Bhavnagar Darbar to form the State Bank of Saurashtra and they are Rajkot State Bank, Porbandar State Bank, Palitana Darbar Bank and Vadia State Bank. Finally in 1960 State Bank of Saurashtra was taken into the State Bank family as one of its fully acknowledged auxiliaries.

Bharat Earth Movers Ltd ( BEML ) which supplies for the Indian Defence service is a Rs 3,500 crores worth company which has been making very good money by flouting the guidelines of the Defence ministry. The majority of the shares of the Bharat Earth Movers Ltd (BEML) are by the Government of India. The frame of the Tatra scam is that orders are placed for the 6x6 and 8x8 trucks and also its related spare parts through Bharat Earth Movers Ltd (BEML) which deals with Tatra Sipox (UK) Ltd, which is neither the original equipment manufacturer nor a subsidiary of the OEM. However Tatra Sipox forwards this information to a company named Jupiter Slovakia, which is a holding company of Vectra Worldwide. Jupiter Slovakia buys the requirement of the Defence Ministry from a supplier and not from the original Czech company where it is supposed to be purchased according to the Defence guidelines.

The rate of the items which comes from the suppliers was priced at an exorbitantly high rate and thus the Indian army ended up paying 200 - 300 percent more than the actual cost. The qualities of such products were also not in good condition. In spite of knowing all these mismanagement taking place the Indian Government was not able to take any action until recently when the former Army Chief General VK Singh, in an interview, admitted that he was offered a bribe of Rs.14 crores for clearing the purchase of 600 substandard Tatra-all-terrain vehicles which came as a shock to all. Once this was unearthed A.K Antony the then Defence Minister of India was enforced to assign a CBI probe into the scam.

The scam was brought into light during September, 2010 when a middleman met the Army Chief General Singh for a clearance of one set of vehicles which is about 1600 vehicles. But however in the year 2010 there was some modification in the rules stating that various manufacturers could apply for the contract through open bidding. Thus the ruling or the exclusive possession of Tatra Company came to an end after nearly 25 years which was a big setback for the same. After this announcement was made by the Government, the deal was signed with Tatra. The reports by the Central Bureau of Investigation stated that the trucks or the vehicles supplied by the Tatra company are the all-terrain trucks which were mainly used in the army to carry missiles, artillery and troops. It is reported that these trucks were manufactured in the Czech Republic for which the country has to a pay a very huge amount. It is said that in Europe a Tatra truck of 4x4 costs about 40 to 50 lakh whereas it was sold to the Indian Army by Bharat Earth Movers Ltd (BEML) at nearly double the actual cost.

Similar kind of trucks have been produced and supplied by Ashok Leyland and Tata Motors at a cost of 16-18 lakhs. Components for the heavy vehicles like the Tatra trucks were available in the Indian market for Rs. 3000 whereas it was purchased by Bharat Earth Movers Ltd (BEML) on behalf of the Army for Rs.30,000.

However when it came to the performance of the Tatra trucks it really didn't fare well for the amount of money which was paid or invested on it. The main whistleblower in the Tatra scam is a defence contractor for the Indian Army named Anil Bakshi. He had clearly stated that the Army was not really very happy with the performance of the trucks for the past few years.

Anil Bakshi was assigned to take the contract so that he gets the vehicles ready to be used after it is was purchased. Anil Bakshi stated that during 2009, 45 Tatra trucks have been purchased and most of them at the time of purchase itself arrived with faulty or damaged tyres and old batteries. So he declined to clear or give approval for the trucks for usage. Few other experts in this line state that the spare parts required for the Tatra trucks were not easily available in the market and BEML took up to two years to deliver the components.

Thus the scam involved BEML buying these trucks and its related spare parts instead from the manufacturer directly they went through another middleman named named Tatra Sipox which is a London based business organization. Tatra Trucks, a Czech firm, is a big name worldwide for all-terrain vehicles. The trucks built by them are exclusively meant for the purpose of construction, mining, oil and gas tankers, forest logging and even firefighting. A whole chain of collaborations enabled it to operate in countries like India, beating other global competitors. But however according to the Government rules all the defence equipment are supposed to be bought directly from the manufacturer which didn't happen in the case of Tatra trucks.

A deal involving transfer-of-technology was signed by India in 1986 with a Czech company named Omnipol. The main reason behind the signing of this agreement was BEML in course of time would learn to or study the technology involved in building of the heavy vehicles locally itself. Thus this deal continued till 1997 of Bharat Earth Movers Ltd (BEML) with London based Tatra Sipox trading firm. But the original manufacturers according to the Government guidelines from whom the defence requirements has to be purchased was the Czech company. In violation of defence rules, a middleman or dealer had entered the picture. BEML never gathered the expertise to eventually build a Tatra-like truck on its own. According to reports the Ministry of Defence had ordered with Bharat Earth Movers Ltd (BEML) for about 788 Tatra vehicles which was worth Rs 632 crores ($141 million). Just imagine this is only one order, the Army has purchased nearly 7,000 Tatra trucks till now. So we can calculate how much of money the Government would have lost in the Tatra truck scam.

Now the scandal being taken for the enquiry by the Central Bureau of Investigation, they are probing into several key parts to narrow down if the bribes and other inducements were offered by Tatra Sipox (UK) owned by Ravi Rishi, a UK based businessman to ensure that Army continued to buy these obsolete trucks. Another main factor where the CBI is trying to confirm whether it was the reason why Tatra enjoyed a monopoly for the past 25 years in truck supply to the Army. Rishi a member of Tatra Czech's supervisory board has been plotted by the CBI for his involvemnet in the scam operation with BEML. He co-opted with BEML officers by tempting them to take early retirement and also through them he was able to find out the plans of BEML. Rishi appointed a retired chairman and managing directors of BEML in his office. It was then the negligent professional behavior allegedly began during his period. The CBI had carried out searches at the residence of the current BEML chairman V R S Natarajan, in connection with apparent irregularities in tendering process for hiring a consultancy firm. He is not above board and has landed in trouble after the CBI inquiry was initiated against him. More than five companies of Ravi Rishi are under the CBI scanner. The CBI and the media have also reported that one more company, Venus Projects Ltd., in which Rishi is supposed to have some stakes, is under the CBI scanner as he apparently used it for buying the related components for the Tatra trucks.

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