Slamming India's 'corrupt systems', $4.8-billion us family that funded prez Obama's campaign, reneges on contract with Bangalore firm, yet signs up for defence deal with govt
Slamming India's 'corrupt systems', $4.8-billion US family that funded prez Obama's campaign, reneges on contract with Bangalore firm, yet signs up for defence deal with govt
A US company that called the Indian judicial and political system corrupt and, therefore, reneged from a commitment to buy vehicles from a Bangalore firm, has done a dramatic volte-face.
Bush Hog CCI entered into a Rs 14,000-crore defence deal at the same that it backed out of its deal with ANZ International.
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Angry, ANZ moved the district court in the US in September 2008 and simultaneously filed a suit for breach of contract with the magistrate court in Bangalore, claiming losses of Rs 85 crore.
The argument
Bush Hog CCI, owned by the US $ 4.8 billion Chicago-based CC Industries Inc, filed an affidavit before an US district court in Alabama, saying the corruption in the Indian criminal justice system pushed them to make an exit from the contractual obligation with ANZ International.
Bush Hog explained to the court that it could not continue to do business with the Indian company because India was a corrupt country.
The company substantiated its argument based on the travel advisory issued by the US state department that mentioned corrupt practices in India, while ranking the country at 85 in terms of corruption.
ANZ had invested more than Rs 85 crore to build a plant in Dabaspet, an hour's drive from Bangalore and employed 900 people.
But just short of a year, Bush Hog served a termination notice and allegedly forced ANZ to enter into a wind-up agreement last year.
"It was a bolt from blue," said Rakesh Vashee, CEO of ANZ International.
"It was a unilateral decision and we had to suffer damages of over hundreds of millions of dollars because our establishment was meant to cater to Bush Hog only."
ANZ was contracted to supply 10,000 units of Ultra Terrain Vehicles per annum to Bush Hog.
At the same time that Bush Hog ended its contract with ANZ, its sister concern General Dynamics entered into a contract with the Indian defence ministry to supply Stryker vehicles with reactive armour, armoured tanks, war heads and other equipment a Rs 14,000 crore contract.
Defence speak
Sitanshu Kar, additional director general, media and communications, Ministry of Defence (MoD), said, "The defence deal between the government and a private company depends on various factors.
A contractual obligation between two private companies is on an entirely different plain, and so we must not analyse a defence deal in that backdrop."
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Dead End? ANZ had invested more than Rs 85 crore to build a plant in Dabaspet, an hour's drive from Bangalore and employed 900 people |
Added N Aao, joint director, MoD, "I've no idea about the company's comments on the judiciary and administrative system. It's a sensitive iss- ue and we can't say anything without knowing the details."
The Other Side
Requesting anonymity, the marketing head at Bush Hog said, "The termination of the contract was legal. The contract had an exit clause that allowed the company to end a business relationship for any reason after a 180-day notice.
Quoting the affidavit the company filed in the US court, he said, "It was difficult for the company to continue a business relationship with the Indian company, because there was unbearable harassment from the company and the local system.
ANZ even threatened Bush Hog and CCI employees with criminal prosecution in India, a tactic the US Department of State has denounced.
However, he declined to comment on General Dynamics' defense deal with India.
Obama connect
Bush Hog CCI is owned by by the family of Henry Crown. The family allegedly made campaign contributions to then US presidential candidate Barack Obama of more than $40 lakh, according to an intelligence reports.
Obama allegedly returned favours and made James Crown, one family member, member of his National Finance Committee, while naming Museum of Science & Industry in Chicago after Henry Crown and extending budgetary support to General Dynamics.
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