India fines IMI $70m for alleged bribery

India's Ministry of Defense seized a $70 million bank guarantee from Israel Military Industries.

For the first time, India's Ministry of Defense has fined a defense company for alleged breach of an integrity agreement in an arms contract: the ministry seized a $70 million bank guarantee of Israel Military Industries Ltd. (IMI), which had been blacklisted for alleged involvement in graft cases related to ordnance factories.

The Indian Ministry of Defense said, "It is the first case in which the integrity pact was brought in vogue and the bank guarantee given by the Israeli Military Industry was encashed for their involvement in corruption related cases. The bank guarantee amounting to Rupee 224 crore has been encashed by the Ordnance Factory Board."

An integrity pact for foreign companies bars them from entering into in any corrupt activity, ranging from hiring middlemen or influencing government officials and processes.

The Indian Ministry of Defense blacklisted IMI in March, for ten years, along with three other foreign firms and two Indian companies, following action against former Director General of Ordnance Factories Sudipta Ghosh, who was indicted by the Central Bureau of Investigation for his alleged role in defense scams.

Published by Globes [online], Israel business news - - on April 17, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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