Article Posted on : - Aug 20, 2014

NEW DELHI (PTI): South African defence firm Denel, which had been blacklisted nine years ago following kickback charges, may soon be able to resume business with India, Defence Ministry sources said.

The blacklisting of the company could end as the CBI has reportedly not been able to prove any charges against the firm in the anti-material rifle purchase, the sources said.

The charges against the firm have not been proved in the nine-year long investigations and the case is likely to be closed. Subsequently, the ministry is considering initiating procedures to remove the firm from the blacklist, they said.

Denel was banned by the UPA government in 2005 after allegations that it paid kickbacks to secure a deal with the Indian Army in 2002 to sell 1,000 NTW-20 anti-material rifles along with 398,000 rounds of ammunition.

Under the deal, 700 rifles were to be purchased directly and the remaining 300 license-produced in one of the factories of India's state-owned Ordnance Factory Board.

Only 400 rifles had been inducted into the Army and the remainder put on hold after the 2005 blacklisting and investigation by the CBI.

The purchase of the anti-material rifles was made during the tenure of the BJP-led NDA government.

The blacklisting of Denel stalled several Indian Army projects, including the purchase of 155mm/52 calibre artillery guns as Denel was the frontrunner in that programme, which was then cancelled.

The blacklisting also delayed the Bhim Artillery Project under which Denel had proposed to install its 155mm artillery gun on an Indian-made Arjun tank chassis.