India Seizes $70M from IMI
India's Ministry of Defense seized a $70 million bank guarantee from Israel Military Industries this week.
The move marks the first time India's Defense Ministry has "fined" a defense contractor for an alleged breach of an "integrity agreement" related to an arms contract.
The Indian Ministry of Defense said, "It is the first case in which the integrity pact was brought in vogue and the bank guarantee given by the Israeli Military Industry was encashed for their involvement in corruption related cases."
"The bank guarantee amounting to Rupee 224 crore has been encashed by the Ordnance Factory Board," it explained.
A so-called integrity pact for foreign companies bars them from entering into in any corrupt activity, ranging from hiring middlemen or influencing government officials and processes.
In March, IMI and five other firms – three foreign and two domestic – were blacklisted for ten years in the fallout of a scandal involving India's Director General of Ordnance Factories, Sudipta Ghosh.
Ghosh was indicted by India's Central Bureau of Investigation for his alleged role in several "defense scams."
A statement following the ban by Israel's defense ministry in March said IMI had "very good claims" against the Indian allegations.
Neither the defense ministry nor IMI have responded to the seizure of the bank guarantee thus far.