SMPP Limited, whose CEO was arrested by the Central Bureau of Investigation (CBI) in an alleged bribery case on Wednesday along with two others, faces possible suspension or a ban on government business dealings by the defence ministry under the government’s rules for procuring weapons and systems, officials aware of the matter said on Thursday.
The manual states that the competent authority may suspend business dealings with an entity pending a full inquiry into allegations or facts relating to any ground for punitive action. The government may suspend business dealings with an entity when it refers any complaint against it to the CBI or any investigating agency or when it receives intimation regarding the initiation of a criminal investigation or inquiry against any entity. “An order of suspension of business dealings with an entity shall result in immediate ineligibility of the entity from participating in future bids. No RFP (request for proposal) will be issued to such an entity. An order suspending business dealings with an entity may extend to its allied firms. The period of suspension ordinarily does not exceed one year. In exceptional cases and those involving national security, the government may order a longer ban. Munitions India Limited was one of the seven defence companies carved out of the erstwhile Ordnance Factory Board (OFB) five years ago. The state-owned firm faces a clean-up and an accountability push following the corruption allegations. The board’s corporatisation was aimed at boosting its efficiency and competitiveness in a long-awaited reform in the country’s defence manufacturing sector.
