Friday, October 16, 2009

Who are ‘officials in the Indian Railway Board’ who took dollar bribe? Matter ignored for 20 months

FOR the last one year and eight months, the Indian government did not react to US Department of Justice’s disclosure of a detailed description of how an US company acknowledged its Indian subsidiary making payment to Indian Railway Board officials to obtain and retain business, schedule pre-shipping product inspections and obtain issuance of product delivery certificates among others. As Indian ambassador to US Meera Shankar’s letter to principal secretary to PM TKA Nair about bribing of Indian officials of various government agencies is now talk of the power corridors of Delhi, babu blogger has made an attempt to dig out an US Department of Justice release which clearly indicates Indian Railway officials taking bribe for helping a railway component maker. There is no mention of politicians being linked to the episode though for record, Lalu Prasad was then the railway minister. The US release dated February 14, 2008 mentioned how New York Stock Exchange-listed Wabtec acknowledged responsibility for the actions of its Kolkata-based subsidiary Pioneer Friction Limited (Pioneer) and its employees and agents “who made various payments to officials of the Indian Railway Board (IRB), a government agency which is part of India’s Ministry of Railroads”. Wabtec, which is headquartered at Wilmerding, manufactures brake subsystems and related products for locomotives, freight cars and passenger transit vehicles among others. One of Wabtec’s subsidiaries, Pioneer Friction Limited (Pioneer), is based in Calcutta, India, and manufactures low and high friction brake blocks for rail operations in India, the release said. The release further talked about why the company paid Indian railway officials. “As described in the agreement with the Department, Wabtec has acknowledged responsibility for the actions of Pioneer and its employees and agents who made various payments to officials of the Indian Railway Board (IRB), a government agency which is part of India’s Ministry of Railroads. These payments were made in order to: assist Pioneer in obtaining and retaining business with the IRB; schedule pre-shipping product inspections; obtain issuance of product delivery certificates; and curb what Pioneer considered to be excessive tax audits," it said. The company had to make a payment of the $300,000 penalty and agreed for further remedial steps including the adoption of rigorous internal controls, the release further said. In another US Department of Justice release dated January 8, 2009, it was mentioned that a former executive at California valve company pleaded guilty to bribing foreign government officials where the name of Maharashtra State Electricity Board figured among various other government agencies like Petrobras (Brazil), Dingzhou Power (China), Datang Power (China), China Petroleum, China Resources Power, China National Offshore Oil Company, PetroChina, KHNP (Korea), Petronas (Malaysia), Dolphin Energy (UAE) and Abu Dhabi Company for Oil Operations (UAE). Read the full text: US Department of Justice release (Feb 14, 2008)


  1. Yes, we always wake up very late. It should be investigated at least now on a fast track.

  2. This could be a tip of an iceberg. And it's not just confined to Indian Railways alone.

  3. This is hardly surprising. Mr SK Nagarwal a railway engineer who blew whistle on corruption has been implicated in various disciplinary cases to perhaps deter likes of SK Nagarwal from exosing more scams. The state of vigilance machinary is such that whistle blowers are affraid of CVC and those indulging in corruption are not . Latest example being husband and wife duo of MP cadre and a CPMG of Mahrashtra who were in the news recently after being raided by CBI and Income Tax.