Controversy surrounds Rs 300 Cr BSNL deal

BSNL-Cisco 300 Cr deal has ended up in a controversy, which allegedly has caused a huge loss to country taxpayers. The controversy primarily involves two dealings.

1. BSNL’s Rs 95 crore purchase order for Cisco equipments for expanding India’s National Internet Backbone.
2. BSNL’s Rs 300 crore annual maintenance contract for 5 years and purchase of new hardware.

The Rs 45 Cr amount under dispute in these two doubtful dealings was allegedly banked in the ‘slush funds’.

These deals were done to expand National Internet Backbone (NIB) infrastructure. And BSNL chose Delhi based Presto Infosolutions to place the purchase order. Presto relatively minor player in this field, in turn outsourced the PO from Ingram Micro. Outdated equipment were purchased at higher rates and that too were under-invoiced by Ingram Micro causing avoidance of customs duties and taxes to the government.

These doubtful dealings arises the BIG question, like why BSNL has selected Presto in the process while there were much larger companies present that are Cisco channel partners. Why BSNL did not check Presto capabilities to fulfill the deal.

After the matter was highlighted, California based Cisco’s global ethics team began the internal investigation. As per the market rumours apparently the Cisco internal team did not find anything untoward in the whole deal.

Apparently the ball now is in the court of BSNL who in turn has approached Central Vigilance Commission for further investigation.  At the time of going to press it was heard that CVC too is yet to find anything untoward with the deal, though investigation is still on.

DQ Channels tried speaking to all the actors in the drama but has received a categorical statement only from Cisco and Ingram Micro. As per Cisco official statement, "As a matter of corporate policy Cisco does not comment on customer relationships or internal processes. Cisco has been recognized around the world for our long-standing commitment to ethics and integrity. We expect our employees and partners to maintain the highest levels of ethical and responsible business practices at all times."

Krishnan Jaishankar of Ingram Micro replied via mail "As a Corporate Policy, Ingram Micro, does not comment on unsubstantiated rumours or allegations. Ingram Micro requires all our Partners and Associates to strictly follow the Code of Conduct as published by Ingram Micro, in all their business dealings and to be governed by the highest standard of Ethics and Compliance in all their actions. This is intrinsic to the way we do business and to our relationships."

We also contacted BSNL via mail as well as telephonically but have received no answer till the time of uploading the story. While we also tried to reach Presto Infosolution, but there was no answer.

Watch out this space for further details.