KOCHI: A Special CBI Court in Ernakulam has sentenced two former senior executives of state-run Steel and Industrial Forgings Ltd to three years of rigorous imprisonment for tender manipulation and corruption in the supply of critical battle tank components to the Defence Ministry. The court sentenced former managing director S Shanavas and former senior manager A Valsan, ordering both convicts to pay a fine of Rs 20 lakh each. In addition, the court penalised private firm AMW-MGM Forgings, arraigned as the sixth accused in the prosecution records, with a fine of Rs 10 lakh for its role in cartel formation and price rigging during the 2011 defence procurement drive.
Collusion in Tank Parts Tender
The case arose from a criminal conspiracy hatched to subvert the competitive bidding process for the procurement of 527 road-wheel arms, which are vital components required for battle tank assembly at the Ordnance Factory in Medak. According to the Central Bureau of Investigation, the public sector executives colluded with private industry representatives after the Ordnance Factory floated a Limited Tender Enquiry in 2011. The investigating agency established that the conspirators deliberately coordinated their actions to form an unlawful cartel, artificially inflating unit prices and restricting fair market competition to extract illicit commercial gains while inflicting wrongful financial losses on the public exchequer.
Role of Intermediary and Approver
Investigating officers found that the fraudulent dealings unfolded between August 2011 and December 2012 across Medak in Andhra Pradesh and Thrissur in Kerala. During this period, Subi Mally, the managing director of Mumbai-based Subshi Impex Pvt Ltd, acted as the vital intermediary bridging communication between the state-owned manufacturing unit and private enterprise interests. The CBI later secured Mally as an approver in the matter, and his comprehensive testimony as a prosecution witness helped establish how clandestine contacts were formed to undermine the bidding procedures through corrupt channels and illicit arrangements.
Acquittal of Three Co-Accused
While handing down sentences to the senior brass of the Thrissur-based public sector undertaking, the special court acquitted three other individuals named in the chargesheet due to a lack of sufficient incriminating evidence. Those cleared include V K Panda, former general manager of the Ordnance Factory in Medak, along with T Muralidhar Bhagvat, former managing director of AMW-MGM Forgings in Mysuru, and K R Mugilan, a former manager at the same firm. The judgment holds substantial weight for transparency in national defence contracts, affirming penal liability for corporate entities alongside corporate executives when government procurement systems are manipulated for undue pecuniary gain.
