The Hindu Business Line : Deal with Sudanese co only for non-combat vehicles: Ashok Leyland

ASHOK Leyland Ltd has clarified that the deal it signed with a Sudanese company was to supply 4x4 logistics trucks designed for passenger and goods transportation in off-road situations and not for combat applications.

Further, the company has said that the Sudanese company in question has not opened a letter of credit within the stipulated time and therefore "the agreement has not become operational and no transactions have been made."

The company issued a statement clarifying its deal with the Sudanese company in response to newspaper reports of a British Broadcasting Corporation (BBC) programme accusing the Hinduja brothers — Ashok Leyland is a Hinduja group company — of breaking a United Kingdom Government ban on military sales to Sudan.

Ashok Leyland's statement said that "the sting operation, alleged to have been carried out by the BBC's Newsnight programme, claims that certain directors of Ashok Leyland breached the UK's The Trade in Controlled Goods (Embargoes Destinations) Order 2004." "That is not the case," the statement said and added that the vehicles mentioned in the agreement with the Sudanese company and the "sting" operation were meant for humanitarian use and so were not covered by the Controlled Goods Order. "As such, we have been legally advised that no UK law has been infringed," the statement said.

It said that in February 2005, Ashok Leyland (AL) signed a cooperation agreement with GIAD for Automotive Industry Co (GIAD), a company registered under the Sudanese Companies Act, outlining the terms under which GIAD would import Ashok Leyland vehicles in semi-knocked down condition for assembly in Sudan. The vehicles covered by the agreement are Falcon large buses, Eagle mini-buses and Stallion 4x4 trucks.

The statement said the agreement referred to GIAD assembling the vehicles for sales to the public and private sectors and neighbouring countries. GIAD had confirmed that these were intended for civilian passenger transport and humanitarian purposes and that under no circumstances any vehicle would be used for anything other than these purposes.

It said that this agreement was entered into in the normal course of business, as part of the company's export development thrust in several countries. "Such agreements are not, and in particular, this agreement with GIAD was not informed to the company's board of directors because AL board processes do not deal with specific country-wise operational details of the company's export function.

"The company can also confirm that the Hinduja brothers, who are not on the board of the company, have no role in securing this agreement either directly or indirectly."

Pointing out that it was registered under the Indian Companies Act, 1956 and that it was governed by Indian laws, the statement said, "we have been legally advised that the said agreement is not in violation of any Indian law."

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