Tatra scam: Rs 750 crore siphoned off, CBI finds no evidence

CBI on Tuesday filed a closure report in alleged Tatra truck scam citing lack of evidence. The premier investigating agency has submitted its status report to the Special CBI court.

What is Tatra Scam

• The scam is all about a possible embezzlement of a sum of Rs 750 crores of Government funds, perpetrated by the Bharat Earth Movers Limited (BEML) in collusion with the Ministry of Defense.

• On March 30, CBI registered a case naming Rishi and unnamed officials of defense ministry, Army and BEML for alleged criminal conspiracy and irregularities in the purchase of the all-terrain Tatra vehicles by the Indian Army from the Bharat Earth Movers Limited (BEML), a Bangalore-based company.

• It was alleged that BEML officials, and the defence ministry siphoned off at least Rs 750 crore in bribes and commissions in the purchase of Tatra trucks and its components.

• According to the defence procurement guidelines, all purchases should be made from the original equipment manufacturer (OEM).

• But BEML has been flouting the guidelines and has been making purchases from a middleman in London.

• Since 1986, the Indian Army has bought over 7,000 Tatra trucks.

What is Tatra?

• The Tatra trucks are the backbone of army's artillery and transportation wings.

• The Indian Army uses Tatra all-terrain vehicles to mount guided missile launchers and haul heavy artillery.

• It also uses these vehicles to transport personnel, supplies, tanks, ammunition etc.

How did the scam come to light?

• The Tatra deals with the Army came under the scanner after the following:

• In August 2009, SN Ashoka, a former Assistant General Manager in the Trucks Division of BEML wrote a memorandum to his boss, the Chairman of BEML VRS Natarajan and said the following:

• He raised charges of corruption against the Chairman in the note.

• He also said that the Tatra trucks were being bought with the help of middlemen.

• As per reports, Hanumanthappa, the President of the All India Federation SC/ST, Karnataka, also submitted a confidential report written by Ashoka to Sonia Gandhi, Defense Minister AK Antony and President Pratibha Patil.

• Later, even General VK Singh, the chief of the Army, disclosed that he was offered a bribe of Rs 14 crores to clear sub-standard trucks.

Who all were allegedly involved in the scam?

• The then Army chief V K Singh alleged that Lieutenant General (Rtd) Tejinder Singh had offered him `14 crore for clearing a tranche of "substandard" Tatra trucks.

• BEML chief VRS Natrajan.

• The Vectra Group owner Ravinder Rishi.

Who all benefitted in the scam?

Senior advocate KS Periyaswamy, a shareholder of BEML, who sought the intervention of the president and a CBI probe into the Tatra deals was quoted as saying in DNA, "At least 15% of the money sanctioned for the purchase of Tatra trucks is siphoned off as commission. Everyone from top to bottom gets their share. In my capacity as shareholder, I had highlighted this issue in the 2002 annual general meeting, but it wasn't taken up."

What is the latest development

• CBI on Tuesday (August 26, 2014) closed its probe into the Tatra scam saying that there was insufficient evidence to file a charge sheet in the case.

• The agency filed its closure report before Special CBI court in New Delhi on Tuesday.