STEng – BT

ST Kinetics blacklisting covers all India agencies

Firm can still legally challenge blacklist, and wait for court ruling on arbitration

It’s official and any doubts have now been cleared.

Singapore Technologies (ST) Kinetics will not be able to do any defence business with India’s Ministry of Defence and all of its agencies, and not just the country’s defence procurement agency as the company had hoped.

In a fresh life line, though, the judge presiding over the case ruled yesterday that the Singapore-based defence supplier will be given an opportunity to legally challenge the blacklisting.

In a BT report yesterday, ST Kinetics had expressed concern over the fairness of the legal process surrounding its implication in a corruption case of a high-ranking Indian official, which has seen the company receiving a disbarment order in doing business with the Ordnance Factory Board (OFB). ST Kinetics was blacklisted following initial investigations conducted by India’s Criminal Bureau of Investigation (CBI), which was probing Sudipta Ghosh, the former director-general of OFB, over the award of defence contracts. Ghosh has since been charged with corruption. No charges have been levelled against ST Kinetics, but it found itself being barred from doing business with OFB according to the official order last week.

Owing to the ambiguity of the order, ST Kinetics had hoped that its blacklisting would only be limited to any dealings with the OFB and not other segments of India’s lucrative defence industry.

It had filed three petitions in the Delhi High Court accordingly to overturn the blacklisting decision on three tenders it had entered into with the Indian defence authorities. One was for it to supply 50,000 Singapore Assault Rifles (SAR) 21 carbines to the Indian Home Affairs Ministry through an off-set arrangement with the OFB and the other two were for two artillery gun tenders with the Indian Ministry of Defence.

In a hearing of the case in the Delhi High Court yesterday, ST Kinetics argued that since the debarment order only mentioned OFB, its other two petitions should hold, making the case for it to continue business with the defence ministry.

But the argument was quashed as representatives of the Indian defence authorities in the court yesterday confirmed that the blacklisting will apply to all dealings across the country’s defence ministry, including the OFB and other defence agencies.

The judge disposed of all three petitions filed by ST Kinetics earlier due to their loss of relevance as the blacklisting will also apply to the other two tenders that ST Kinetics had initially entered with the Indian Ministry of Defence.

Instead, the judge granted ST Kinetics the liberty to file fresh petitions, which will give the company a chance to legally challenge the blacklisting in its entirety.

ST Kinetics has been arguing that no incriminating evidence has been produced against it, and that it has been blacklisted purely on the basis of circumstantial evidence.

BT understands that ST Kinetics has also approached the Indian Supreme Court, where a hearing is due on March 26. It is understood that the company is fighting for the Supreme Court to rule that the case be resolved via international arbitration since there have been no criminal charges filed against the company by the Indian government.