Rs. 225 Crore Scam CBI files case against Air India SAP IBM

Rs. 225 Crore Scam CBI files case against Air India SAP IBM

The Central Bureau of Investigation has registered a case against unknown officials of Air India, German Software company & another company of USA and other unknown person’s U/s 120B r/w 420 of IPC & Sec. 13(2) r/w 13(1)(d) of PC Act 1988 on a reference from Central Vigilance Commission. The allegations are regarding improper procurement of software for Rs.225 Crores (approx.) by Air India in 2011

CBI has registered the FIR under IPC sections related to criminal conspiracy and cheating.

The CBI has registered the case on the recommendation of the Central Vigilance Commission which found prima facie procedural irregularities in the procurement of the software from the accused firms

The CVC had requested the CBI to probe the "irregularities in the tendering process, award of contract and undue benefit caused to the German firm SAP and American giant IBM.

A self-contained note from the CVC, which is part of the CBI FIR now, the CVC had highlighted that the probe by the CVO pointed out that the Air India had selected the Enterprise Resource Planning (ERP) software system from SAP AG without following proper tendering procedure, justification or talking due approval from the Ministry of Civil Aviation.

The CVO had found that the ERP system of Oracle was already in existence and no effort was made to upgrade the existing system.

It was stated that the Oracle system had some problems but no efforts were apparently made to either set them right or upgrade the existing system. Also, open tender system was not adopted for procurement of new ERP software Instead the contract was awarded to SAP and IBM on nomination basis
It is alleged that Air India acted on the proposal submitted by SAP without making any cost estimate and analyzing technical specifications.
It is alleged that SAP's proposal was approved by the Air India Board the day it was submitted.
It also came to light that other private airlines had purchased the same software at a lower price

"Before finalization of the contract, DGS and D suspended its contract with SAP on November 29, 2010. However, Air India went ahead and finalized the above agreement after obtaining indemnity certificate from SAP against any future reduction of rates and SAP agreed to provide indemnity upto December, 2011 and accordingly the contract was finalized on January 6, 2011," the CVC alleged.

The Central Vigilance Commission in its note to CBI said it has come to conclusion that Air India has not followed the proper procedure in this case due to which they have paid "highly excessive" cost in comparison to other private airlines.

No one is guilty and criminal unless and until pronounced by the court of law.

Reality views by sm –

Saturday, January 14, 2017

Tags – Air India 225 Crore Scam IBM SAP Bribe