India’s defence procurement system is once again under scrutiny after the Central Bureau of Investigation arrested senior officials and a private defence executive in a bribery probe linked to a ₹500-crore ammunition contract. According to the reports, the Ministry of Defence may now move against SMPP Limited by suspending business dealings, though no official decision has been announced yet.
Officials familiar with the matter said the Department of Defence Production is expected to examine the case under existing procurement rules and guidelines. The reported action follows the arrest of Ashish Kansal, CEO and promoter-director of SMPP Limited, along with Anil Kumar, Executive Director (Operations) of state-owned Munitions India Limited (MIL), and Kumar’s brother B Harshavardhan.
What the CBI case alleges
The CBI registered the case on October 12, 2026, and made the arrests on October 13. In its allegation, the agency said Kumar worked in collusion with private contractors and vendors and sought illegal gratification in return for official favours and for sharing sensitive information related to defence production, procurement and other strategically important activities of MIL. The FIR stated that such disclosure could harm national strategic and security interests and weaken the integrity of defence procurement.
The reports say SMPP had received a ₹500-crore ammunition supply contract from MIL for one year. Kansal was said to be in regular contact with Kumar in connection with that contract. An SMPP employee, Ravit Kumar Tewatia, was also named. The agency further alleged that Kumar moved portions of the suspected illegal proceeds through his wife Chetnashri, his brother Harshavardhan and other relatives.
One report cited in the source claims that a tip-off about a late-night hawala delivery to Kumar’s Pune residence led investigators to intercept about ₹1.7 crore and track the trail of intermediaries back to Kansal. This part of the account appears to be based on investigative reporting; the core arrests and cash recoveries, however, are confirmed in the source.
Cash seizures and custody
During searches, the CBI recovered ₹1.73 crore in cash from Kumar’s premises in Pune. Additional searches at locations linked to the accused in Mysuru, Bengaluru and Delhi reportedly yielded around ₹50 lakh in cash and incriminating documents, taking the total cash seizure to about ₹2.23 crore. A special court in Pune remanded the three accused in CBI custody till October 19. The Defence Ministry has already suspended Anil Kumar with effect from October 13.
How the ministry can act
Under the Defence Procurement Manual 2025 and the Ministry of Defence Guidelines for Penalties in Business Dealings with Entities, the competent authority can impose financial penalties and/or suspend or ban business dealings with an entity that uses corrupt practices, unfair means or illegal activities at any stage to secure a contract, even where a Pre-Contract Integrity Pact is not required.
The source says suspension can be ordered while a full inquiry is pending, when a complaint is referred to the CBI or another investigating agency, or when the ministry is informed that a criminal investigation or inquiry has begun. Once suspension takes effect, the entity cannot take part in future bids, and no Request for Proposal is issued to it.
The suspension may also extend to allied firms, and in joint ventures or consortiums, partners may be treated as suspended too. The normal period does not exceed one year, though some reports cited an initial six-month period under newer guidelines that may be extended by the concerned secretary. Longer action can be taken in exceptional cases involving national security. Even then, suspended entities may still be allowed to respond to future RFPs for spares, upgrades and maintenance of proprietary equipment they had earlier supplied, if no alternative source is available.
About SMPP Limited and Ashish Kansal
SMPP Limited, part of the SM Group, was founded in 1985 by Dr. S.C. Kansal, an IIT Bombay PhD in Chemical Engineering, as S.M. Pulp Packaging Private Limited for manufacturing pulp packaging materials. It later expanded into defence production and now makes combustible cartridge cases, bulletproof jackets, ballistic helmets, armour solutions including boron carbide ceramics, ammunition components, and, more recently, loitering munitions and drone-related systems.
The company has a manufacturing facility at Palwal, Haryana, and has secured notable orders from the Indian Army, including a large contract for over 1.86 lakh bullet-resistant jackets, as well as recent emergency procurement orders for jackets and helmets. The source also says it has undertaken export orders.
Ashish Kansal has been associated with the company since 2003 and was appointed Whole-time Director and CEO with effect from August 17, 2024. He holds a bachelor’s degree in textile technology from IIT Delhi and a master’s degree from the Georgia Institute of Technology.
Neither SMPP nor the Ministry of Defence had issued an official response at the time of the latest reports. The CBI investigation is continuing, and the agency is also examining other contracts handled by Anil Kumar, along with the roles of additional individuals named in the FIR.
The development comes amid broader efforts to strengthen accountability and curb corruption in defence procurement after the corporatisation of the erstwhile Ordnance Factory Board, from which MIL is one of the seven entities formed.
