CBI Charges Former Air India CMD, IBM, and SAP in Rs 225 Crore Software Procurement Scam

The Central Bureau of Investigation (CBI) has filed a chargesheet against former Air India Chairman and Managing Director (CMD) Arvind Jadhav, along with IBM India and SAP India, for alleged irregularities in a Rs 225 crore software procurement deal in 2011.

The case was initiated by the CBI following the recommendation of the Central Vigilance Commission (CVC), which identified procedural irregularities in the software procurement process, according to sources familiar with the investigation. After nearly six years of investigation, the CBI has filed charges against former Air India CMD Arvind Jadhav, IBM India Private Limited, SAP India Private Limited, and six others under Section 120-B of the Indian Penal Code (IPC) for criminal conspiracy, along with provisions of the Prevention of Corruption Act.

The CVC, in a communication to the CBI, highlighted that an initial probe by Air India's chief vigilance officer revealed that the national carrier had selected the Enterprise Resource Planning (ERP) software system from SAP AG without adhering to proper tendering procedures.

It was alleged that despite Air India's claims of presenting the ERP software to the Group of Secretaries in July 2009 and the Group of Ministers in 2010, there was no approval from the civil aviation ministry for the procurement.

The commission also raised concerns about Air India selecting software from SAP AG, the world's largest ERP provider, without justifying the necessity, especially when a similar system from Oracle was already in use. Additionally, the CVC noted that efforts to rectify issues with the existing Oracle system or explore open tendering for new ERP software procurement were lacking.