India blacklists ST Kinetics, 5 other arms firms

Singapore armament firm ST Kinetics, which produces military weapons such as the howitzer (above), has been blacklisted by India.

NEW DELHI - India on Monday blacklisted six armament firms for 10 years for their alleged role in a 2009 weapons bribery scandal, a government statement said.

The firms targeted by the defence ministry included Singapore Technologies (ST) Kinetics Ltd, Switzerland's Rheinmetall Air Defence, Israeli Military Industries Ltd and Russia’s Corporation Defence (CDR), the statement said.

"The firms were recommended for blacklisting by the Central Bureau of Investigation on the basis of evidence collected against them," the statement by the defence ministry said.

The two other companies blacklisted were both Indian firms - RK Machine Tools Ltd and TS Kisan and Co Private Ltd, the statement faxed to AFP said.

No comment was immediately available from the companies named in the statement, which said those blacklisted cannot do business with the Ministry of Defence "for a period of 10 years".

India froze deals worth US$1.5 billion (S$1.88 billion) in 2009 with seven companies after police arrested a top defence ministry bureaucrat on charges he allegedly accepted bribes from the firms.

The firms were issued notices to show why action should not be taken against them in relation to the bribery case, the statement said.

"The decision to debar (the companies) was taken today after taking into consideration their replies," the statement said.

The ban prevents ST Kinetics from closing billion-dollar contracts to supply ultralight and towed howitzers to the Indian Army.

Singapore's Pegasus ultralight howitzer was widely regarded as the deal clincher for ST Kinetics until the corruption scandal broke.

The Pegasus is a lightweight 155mm 39-calibre howitzer with self-propelled capabilities. It is also transportable by aircraft.

The Straits Times said India was planning to buy 145 pieces of 155mm ultralight howitzers, as well as shopping for another 400 pieces of towed 52-calibre guns, with another 1,180 pieces to be assembled in India under licence.

Indian defence procurement has traditionally been an opaque business, marred by postponements, and repeated re-negotiations over cost and scandals.

An artillery bribery scandal in 1986 involving then Swedish firm Bofors AB led to the downfall of the government of then prime minister Rajiv Gandhi.

The nuclear-armed South Asian giant is one of the world's biggest military spenders, purchasing weapons worth tens of billions of dollars to modernize its million-plus army, which is the world's fourth-largest.