NEW DELHI, 5 February 2003 — The Central Bureau of Investigation (CBI) yesterday registered a case against Air-India Managing Director J.N. Gogoi, two of his predecessors and 11 others, for alleged bungling in aircraft purchases.
“We have filed a case against the Managing Director J.N. Gogoi. A case has also been registered against two former managing directors Michael Mascarenhas and Brijesh Kumar,” said a CBI official. The CBI also registered a case against wife of Mascarenhas, Aruna, the official said.
The agency had received information about large-scale irregularities in the controversial deals of Caribjet in 1994-95.
The deal involved the purchase of two aircraft on wet lease from Caribjet Inc., a company registered in the Caribbean Islands, in 1994. Air-India, the country’s national flag carrier, purchased five more aircraft in 1996. Officials said the deal led to an alleged loss of over one billion rupees to Air-India. “We had questioned all these officers last year when we filed a preliminary complaint,” the CBI official said.
The accused have been charged with conspiracy to cheat the government exchequer under various sections of the Prevention of Corruption Act.
The loss on account of “faulty negotiation” in the first deal is allegedly to the tune of 33.5 million rupees. Air-India again had to pay 1.03 billion rupees in damages when the deal went into arbitration in London in 1997. The crucial termination clause, which normally protects the buyer from unsatisfactory performance of the supplier, was missing in the contract.
Since this clause did not exist when Air-India terminated the contract without notice, the latter’s stand was compromised and Caribjet benefited, the official said.
The deal was struck when Brijesh Kumar was the managing director and Mascarenhas the commercial director.
Gogoi and Mascarenhas’s wife participated in the negotiation process in different committees that had screened the proposal.
The CBI had filed a case against Mascarenhas at the request of the Civil Aviation Ministry in 2001.
The case was filed after a Comptroller and Auditor General of India (CAG) report revealed Mascarenhas had allegedly shown undue favors to the London-based Welcome Travels to the tune of 570.20 million rupees from 1987 to 2000 in the form of performance-linked incentives.
According to the then CAG report, corruption at top levels had cost the airline a whopping 3.50 billion rupees.
Mascarenhas was suspended on May 23, 2001 and replaced by Gogoi. Interestingly, CBI cleared Mascarenhas of all charges after six months. After he was cleared, the government decided to reinstate him as the managing director on November 28, 2001. The move was significant because he was to retire two days later. Gogoi also got an extension for six months last week.
