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CBI Files Charge Sheet Against IBM, SAP India, Air India Over Irregularities in Software Procurement

CIO Insider Team | Monday, 5 February, 2024
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The CBI has filed a charge sheet against IBM, SAP India, and the former CMD of Air India in relation to speculated irregularities in the national carrier's 2011 procurement of software for Rs 225 crore.

The Central Vigilance Commission (CVC), which found prima facie evidence of procedural errors in the software acquisition process, made recommendations that sparked the case. The accused parties are currently facing accusations under the Prevention of Corruption Act and section 120-B of the Indian Penal Code, which deals with criminal conspiracy.

Following nearly six years of investigation, the CBI has filed a charge sheet under the terms of the Prevention of Corruption Act and IPC section 120-B (criminal conspiracy) against former CMD Air India Arvind Jadhav, IBM India Private Limited, SPA India Private Limited, and six other parties.

According to the CVC's report to the CBI, Air India's chief vigilance officer's preliminary investigation indicates that the national carrier chose the Enterprise Resource Planning (ERP) software system from SAP AG without adhering to the correct tendering procedure.

The CVC also brought attention to the fact that the new ERP software was purchased without using an open bidding process, which resulted in SAP and IBM being nominated directly for the contract. It was purported that the civil aviation ministry had not granted consent, despite Air India's assertion that it had presented it to the Group of Secretaries on July 9, 2009, and the Group of Ministers in 2010.

Additionally, the CVC stated in the letter that the open tender mechanism was not used to acquire new ERP software.

The integrity of all parties engaged is called into question, casting a lasting shadow over the procurement process's fairness and transparency.

Owing to the commission, Air India chose software from the world's biggest ERP vendor without providing evidence of the system's necessity given that an identical Oracle system was already in use.

It was said that there were some issues with the Oracle system, but it didn't seem like any attempts were taken to either fix them or update the current system.

Additionally, the CVC stated in the letter that the open tender mechanism was not used to acquire new ERP software.

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