Government has handed over all files pertaining to dealings with the South African state-owned armament major Denel during the tenure of former Defence Minister George Fernandes to the Central Bureau of Investigation to find out whether there was any maladfide intent in the purchase.
"The preliminary probe is on to examine all dealings of the company with India to find out what went wrong," Defence Minister Pranab Mukherjee told PTI adding all contracts with the South African firm reached by the previous NDA regime had been "put on hold" till initial examination is completed.
Mukherjee said the government would consider as to what kind of an inquiry should be conducted after the preliminary findings.
Indicating that it would be the Central Bureau of Investigation that would be handed over the cases pertaining to dealings with foreign suppliers, he said under the agreement reached by the previous regime the company was to supply a large number of bunker-buster anti-material rifles.
Mukherjee's remarks came as the issue of alleged payoffs by the South African armament manufacturer cropped up in both Houses of Parliament on Wednesday with treasury benches making a vociferous demand for handing over the case to the CBI.
A South African newspaper alleged that Denel had paid nearly 13 per cent commission to British Isles based Varas Associates to influence India's decision to choose the South African firm as suppliers of anti-material rifles in 2003.
While asserting that the supply of these rifles was "frozen", Mukherjee said the freeze would also apply to Denel's technology transfer project at Nalanda in Bihar, Fernandes' parliamentary constituency to produce advanced illuminated artillery and tank shells for the Indian Army.
"Work has already started on the project but the pace is slow due to the area being infested by Naxalites," Mukherjee said.