India penalizes Israeli military firm over graft
The Indian government has confiscated the bank guarantees of a blacklisted Israeli military company following an Indian defense ministry probe into the Israeli firm’s “murky” arms deals.
The Indian ministry has penalized the Israeli Military Industries (IMI) by cashing its $70 million bank guarantees for “violating an integrity pact” in a contract to set up a plant to produce bi-modular charge systems, a propellant for 155 mm guns, at Nalanda in Bihar in eastern India.
The IMI signed the contract with the Indian OFB-Ordinance Factory Board to build ordnance factories in Bihar for manufacturing bi-modular charges for the Indian Army’s 155mm howitzers. The $260 million contract contained an “integrity pact” covering a commitment to abstain from “malpractice.”
Delhi says the IMI forfeited its guarantee as it was “involved in the offer of a bribe” to the former director general of OFB in 2010.
The IMI was among six firms banned by the Indian defense ministry over corruption charges.
The Indian defense ministry hopes that the Nalanda plant, crucial for the army, would start functioning by the end of this year.
The project has been jinxed right from the point it was conceived in the 1999.
The first contract was awarded to South African company Denel, which was banned on allegations of corruption.
The contract, which has resulted in cost over-runs, was then awarded to IMI, which again got into trouble.
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