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April 6, 2018

Israeli firms IAI and Rafael taken out of restricted list after Barak corruption case closure


The defence ministry has removed Israeli firms, Israel Aerospace Industries (IAI) and Rafael, from its restricted procurements list with the closure of the Barak missile corruption case. This means that the two firms can carry out their business in India.

The firms were added to the restricted list after the Central Bureau of Investigation (CBI) had named them in a FIR lodged in 2006 to probe corruption charges in the procurement of the Barak missiles. The deal worth Rs 1150 crore was signed in 2000 with IAI to provide the Barak missile systems and the armament by Rafael. The CBI had investigated corruption charges against former defence minister George Fernandes and businessman, Suresh Nanda. However, the agency filed a closure report in 2013, claiming that it does not have enough evidence to prove that bribes were paid.

The MOD in its order issued today states that, “Instructions were issued...regarding the modalities for dealing with procurement cases involving two Israeli firms, IAI and Rafael. These instructions were issued in the context of ongoing investigation by the CBI in Barak Missile case, where both these vendors from Israel were named in the FIR and were to be applicable till such time that investigation report or chargesheet was available.”

The order reads that the CBI’s closure report was accepted by the court on January 27 last year. “In light of acceptance of the closure report…the extant instructions dated November 11, 2011 have been reviewed and it has been decided to remove the restrictions and regulations...in dealing with procurement cases involving IAI and Rafael with immediate effect,” it said.

The instructions will be applicable for ongoing and future procurements involving the two firms.

One of the modalities for dealing with procurement cases of the two firms was that the MOD will have to consult the concerned service headquarters whether there existed any viable alternative equipment or proposal.

However, in spite of being on the restricted list the two firms have been involved in defence deals in India. Last year, the IAI was awarded a $630 million contract for supplying Barak 8 Long Range Surface to Air Missile System for four Indian Navy ships. Rafael has been providing replacement missiles for the Barak systems installed on Indian ships.

 economictimes

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