CBI probe puts spotlight on defence firm SMPP

From bullet-resistant jackets for the Army to ammunition components and jet-powered drones, the company has built a substantial defence business.

SMPP Limited, a privately-owned Indian defence manufacturer that supplies bullet resistant jackets and ballistic helmets to the armed forces and security agencies and has expanded into ammunition components and unmanned systems, is facing scrutiny after the Central Bureau of Investigation (CBI) arrested its chief executive, Ashish Kansal, in an alleged Rs 500-crore ammunition bribery case involving state-owned Munitions India Limited (MIL).

Government entities accounted for 85.19% of SMPP Limited’s operating revenue in 2023-24, underscoring the privately owned defence manufacturer’s dependence on public procurement. Now, with the Central Bureau of Investigation (CBI) investigating an alleged Rs 500-crore ammunition bribery arrangement involving the company’s CEO, Ashish Kansal, agency sources have told The Sunday Guardian, on condition of anonymity, that investigators will examine other government tenders awarded to SMPP amid suspicions that bribes may also have been paid to officials to secure contracts.

SMPP’s draft red herring prospectus, filed in October 2024, shows that revenue from government entities rose to Rs 439.65 crore in 2023-24 from Rs 238.43 crore in 2022-23 and Rs 275.64 crore in 2021-22. Government entities accounted for 67.96% and 74.72% of operating revenue in the two preceding years, respectively. The company’s ten largest customers accounted for 92.78% of operating revenue in 2023-24, highlighting its dependence on a concentrated customer base. The prospectus defines government entities broadly, including central and state government bodies, government-controlled organisations, and military, paramilitary and police forces in India and overseas.

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The CBI registered the case on 12 October against Anil Kumar, executive director at state-owned Munitions India Limited (MIL); Kansal, CEO and director-promoter of SMPP; Ravit Kumar Tewatia, an SMPP employee; B. Harshvardhan, Kumar’s brother; Chetnashri, Kumar’s wife; SMPP Limited through its representative; and unidentified others.

According to the FIR, the alleged arrangement centred on an ammunition-supply contract worth approximately Rs 500 crore over one year. Kansal is alleged to have been in regular contact with Kumar regarding the contract. The CBI also suspected that confidential information, including details concerning rival bids, was sought as part of the alleged arrangement. The agency suspected that a substantial illegal payment was to reach Kumar on 12 October.

The defence argued before the court that investigators had already seized the alleged bribe money and relevant documents, making further custody unnecessary. It also challenged Kansal’s arrest on the ground that he had not been served a notice under Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita.