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.

ST Kinetics cries foul, starts battle to clear its name

Blacklisted in India but not charged, it seeks international arbitration

A leading Singapore defence supplier says that it has been treated unfairly in India – the world’s biggest importer of arms – and will seek international arbitration to protect its reputation.

But first, it will try to convince an Indian court today of the merits of its case.

Singapore Technologies (ST) Kinetics, formally barred this month from doing business with India’s defence procurement agency, the Ordnance Factory Board (OFB), is trying to get the decision reversed.

‘Any decision reached thus far has been an administrative one and so we are awaiting a proper legal decision,’ a spokesman for ST Kinetics told BT.

ST Kinetics was blacklisted following initial investigations conducted by India’s Criminal Bureau of Investigation, 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 finds itself being barred from doing business with OFB.

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.

The case is due for another hearing today in the Delhi High Court, where the Singapore-based company is opposing the action taken against it, even though it faces no formal charges. Regardless of the outcome, ST Kinetics will continue to pursue legal avenues to clear its name, the spokesman for the company said.

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.

The company was dragged into the case following a report by the Comptroller and Auditor-General of India (CAGI), which outlined the behaviour of Ghosh, who is at the heart of the case, and his involvement with ST Kinetics and six other defence companies ranging from India, Israel, Russia and Switzerland.

ST Kinetics had an agreement with Ghosh’s agency to supply 50,000 Singapore Assault Rifles (SAR) 21 carbines to the Indian Home Affairs Ministry (MHA). Ghosh claimed that ST Kinetics would co-produce the weapons with an Indian partner. No such arrangement existed, the report said. However, an Indian media report dated Aug 27, 2010 stated that such an agreement did exist and even said that it had been shown the relevant Memorandum of Understanding (MOU) by an ST Kinetics senior official. The MOU, signed April 30, 2008, reportedly specifies a workshare and production arrangement, with more than 50 per cent of the weapon order produced by OFB, the report in the StratPost, a South Asian defence publication, said.

A recent report said that India has leapfrogged China to become the biggest importer of arms in the world. Between 2007 and 2011, it accounted for almost 10 per cent of global arms imports.

Even though ST Kinetics does not have any defence contracts in India, it has commercial business in addition to the presence there of other ST subsidiary companies, making it important for the company to clear its name of these allegations.

In fact, BT has learnt that when news of the case first broke in 2009, Indian media reports mistakenly suggested that Singapore Technologies, the parent group, had been implicated. The fallout for the rest of the group has since been minimised as it has been made clear that it was only ST Kinetics that had been dragged into the case, and no other ST company was involved.

As the blacklisting order refers only to OFB, it is unclear if ST Kinetics will be allowed to do business with other defence entities in India. The company was in the process of bidding for other defence contracts when its blacklisting was announced. BT has learnt that just last week, it took part in a trial for an Indian Ministry of Defence artillery guns order.

‘We will wait to see what happens but will pursue all roads to clear our name,’ the company spokesman said.

ST Kinetics cries foul, starts battle to clear its name

Blacklisted in India but not charged, it seeks international arbitration

A leading Singapore defence supplier says that it has been treated unfairly in India – the world’s biggest importer of arms – and will seek international arbitration to protect its reputation.

But first, it will try to convince an Indian court today of the merits of its case.

Singapore Technologies (ST) Kinetics, formally barred this month from doing business with India’s defence procurement agency, the Ordnance Factory Board (OFB), is trying to get the decision reversed.

‘Any decision reached thus far has been an administrative one and so we are awaiting a proper legal decision,’ a spokesman for ST Kinetics told BT.

ST Kinetics was blacklisted following initial investigations conducted by India’s Criminal Bureau of Investigation, 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 finds itself being barred from doing business with OFB.

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.

The case is due for another hearing today in the Delhi High Court, where the Singapore-based company is opposing the action taken against it, even though it faces no formal charges. Regardless of the outcome, ST Kinetics will continue to pursue legal avenues to clear its name, the spokesman for the company said.

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.

The company was dragged into the case following a report by the Comptroller and Auditor-General of India (CAGI), which outlined the behaviour of Ghosh, who is at the heart of the case, and his involvement with ST Kinetics and six other defence companies ranging from India, Israel, Russia and Switzerland.

ST Kinetics had an agreement with Ghosh’s agency to supply 50,000 Singapore Assault Rifles (SAR) 21 carbines to the Indian Home Affairs Ministry (MHA). Ghosh claimed that ST Kinetics would co-produce the weapons with an Indian partner. No such arrangement existed, the report said. However, an Indian media report dated Aug 27, 2010 stated that such an agreement did exist and even said that it had been shown the relevant Memorandum of Understanding (MOU) by an ST Kinetics senior official. The MOU, signed April 30, 2008, reportedly specifies a workshare and production arrangement, with more than 50 per cent of the weapon order produced by OFB, the report in the StratPost, a South Asian defence publication, said.

A recent report said that India has leapfrogged China to become the biggest importer of arms in the world. Between 2007 and 2011, it accounted for almost 10 per cent of global arms imports.

Even though ST Kinetics does not have any defence contracts in India, it has commercial business in addition to the presence there of other ST subsidiary companies, making it important for the company to clear its name of these allegations.

In fact, BT has learnt that when news of the case first broke in 2009, Indian media reports mistakenly suggested that Singapore Technologies, the parent group, had been implicated. The fallout for the rest of the group has since been minimised as it has been made clear that it was only ST Kinetics that had been dragged into the case, and no other ST company was involved.

As the blacklisting order refers only to OFB, it is unclear if ST Kinetics will be allowed to do business with other defence entities in India. The company was in the process of bidding for other defence contracts when its blacklisting was announced. BT has learnt that just last week, it took part in a trial for an Indian Ministry of Defence artillery guns order.

‘We will wait to see what happens but will pursue all roads to clear our name,’ the company spokesman said.