Software purchase irregularities: Ex-Air India CMD, IBM & SAP charge sheeted by CBI

New Delhi, Feb 4 (PTI) The CBI has filed a charge sheet against the then CMD of Air India, German firm SAP AG and IBM in connection with alleged irregularities in procurement of software worth Rs 225 crore by the national carrier in 2011, officials said on Sunday.

The CBI has registered the case on the recommendation of the Central Vigilance Commission (CVC) which found prima facie procedural irregularities in the procurement of the software, according to people in the investigation agency in know of the development.

After nearly six years of probe, the CBI has filed a charge sheet against former CMD Air India Arvind Jadhav, IBM India Private Limited, SPA India Private Limited and six others under the IPC section 120-B (criminal conspiracy) and provisions of the Prevention of Corruption Act, they said.

The CVC, in the note to the CBI, said that initial probe by Air India's chief vigilance officer shows that the national carrier had selected the Enterprise Resource Planning (ERP) software system from SAP AG without following proper tendering procedure.

It was also alleged that there was no approval from the civil aviation ministry even though Air India had claimed that it had made a presentation before the Group of Secretaries on July 9, 2009, and before the Group of Ministers in 2010.

The commission had said that Air India had selected the software from the largest ERP provider of the world without justifying the need for the same since already a similar system of Oracle was in operation.

It was stated that the Oracle system had some problems but no efforts were apparently made to either set them right or upgrade the existing system.

Also, open tender system was not adopted for procurement of new ERP software, the CVC said in the note.

"Instead, the contract was awarded to SAP and IBM on nomination basis." PTI