Conflict of interest in Sharma’s new role

The conflict of interest is glaring, but his role in the now graft-tainted VVIP helicopter deal while serving in the Defence Ministry over the last decade has not stopped Shashikant Sharma from being appointed as the country’s top government auditor.

Published: 26th May 2013 11:02 AM  |   Last Updated: 26th May 2013 11:04 AM   |  A+A-


The conflict of interest is glaring, but his role in the now graft-tainted VVIP helicopter deal while serving in the Defence Ministry over the last decade has not stopped Shashikant Sharma from being appointed as the country’s top government auditor.

The 1976-batch Bihar cadre IAS officer has held senior and sensitive positions in the Defence Ministry, including that of Joint Secretary (Air) and Director General, Acquisitions. All of these postings, including that of Defence Secretary, involved his direct role as a decision-maker in military purchases.

Now, having taken over as CAG on Thursday, he will lord over the government audit of the Defence Ministry, in particular its performance, expenditure and procurements, all done during his tenure in the ministry in various capacities since 2003.

And this is where opposition parties feel the conflict of interest lies. The general impression is that the scams-tainted UPA government has found “a pliable” bureaucrat to occupy the constitutional post as CAG and keep it off surprises and shocks—in the form of negative audits that were the norm during Sharma’s predecessor Vinod Rai’s tenure—at least till the next Lok Sabha elections.

As a bureaucrat in the Defence Ministry, who did not wish to be identified, put it: “The government has found a tamed IAS officer to be the CAG now so that it can expect to be free of the fireworks of the past from the auditor’s table for some time.”

Apart from Sharma, the names of senior bureaucrats whose names did the rounds for appointment as CAG were Revenue Secretary Sumit Bose, Planning Commission Secretary Sindhushree Khullar and former Telecom Secretary R Chandrasekhar, but it was the then Defence Secretary, who triumphed in the race, primarily due to his “safe” officer image in the government.

Sharma had, for a short duration of about 10 months, moved out of Defence Ministry in 2010 to be Secretary, Financial Services, before returning as Defence Secretary in 2011, primarily because of the “faith” that Defence Minister A K Antony reposed in him and his ability, say officers in South Block.

However, what has disturbed Opposition parties is the conflict of interest in Sharma’s new role in his new office at Delhi ITO area.

The CAG, under Vinod Rai, was expected to submit an audited report of the latest defence procurement scandal involving the Italian firm AgustaWestland’s VVIP helicopters to Parliament during the recently ended budget session.

The Rs 3,546-crore deal, signed in January 2010 when Sharma was still Director General Acquisitions in the Defence Ministry, came under the auditor’s scanner after reports emerged that Rs 352 crore was paid as bribes by the Italian company to sell its AW-101 helicopters to the Indian Air Force (IAF).

It also emerged that Sharma was Joint Secretary (Air) in the Defence Ministry between 2003 and 2007, responsible for IAF acquisitions, when the key parameters for choosing the VVIP helicopter was tweaked in 2005 to enable AgustaWestland to participate in the tender that was issued in 2006. He was Director General Acquisition when the deal was signed with AgustaWestland.

Yet, he has not been questioned or probed in the deal. A Defence Ministry official, a joint secretary level officer considered too close to him, claimed his role did not come under scrutiny as the Italian middlemen in the VVIP chopper contract had not named him and had only named the former IAF chief and his cousins.

The CAG report on the VVIP choppers deal, though, was not tabled during the budget session of parliament that ended on May 8, two days ahead of schedule. And the audit report’s fate? Not known. During Sharma’s tenure as Defence Secretary, another major defence scam that came to light was the Tatra trucks purchases. Then Army chief General V K Singh had in early 2012 blown the lid off an attempt to offer him a Rs 14-crore bribe to clear a tranche of Tatra trucks.

With Sharma now firmly in the CAG saddle, it is quite possible that he could pick any of the defence deals done in the recent years for scrutiny, as the subject for audit is randomly chosen.

But there are certain key deals that were done under Sharma’s supervision. He was Director General Acquisitions between August 2007 and September 2010 when the Defence Ministry decided on several tenders and purchases including the six C-130Js for Rs 6,000 crore from the US in 2008 and the Rs 11,000-crore deal for eight P-8I maritime reconnaissance planes in 2009, again from the US. As Defence Secretary, he was instrumental in the selection of French Dassault Aviation’s Rafale plane as the ultimate winner of the Rs 1 lakh crore deal for 126 combat planes that the IAF required urgently. The other critical deal worth Rs 7,000 crore with the French for upgrade of 51 Mirage-2000s was also done in 2011 during his tenure in the Defence Ministry as Secretary.

Which of these defence deals will come up for audit before Sharma as CAG is anybody’s guess.

It is this “conflict of interest” that the Opposition BJP had reservations about. Leader of the Opposition in the Rajya Sabha and senior party leader Arun Jaitley had, on Sharma’s appointment as CAG, said the CAG should not be in a position to decide on auditing the defence purchases in which he had a role to play.

The BJP also alleged that the UPA government’s appointments to constitutional and statutory offices established that its policy was to subvert these institutions.

Leader of Opposition in the Lok Sabha Sushma Swaraj joined Jaitley in noting that the UPA government’s policy had been “callous disregard” of all democratic institutions.

This opposition has resulted in a Public Interest Litigation in the Supreme Court challenging Sharma’s appointment. The apex court is slated to hear the petition in July.

For the UPA, the new CAG appointment should not become another albatross around its neck, having once been bitten by its appointment of P J Thomas as the Central Vigilance Commissioner, despite a bribery taint.


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