New Delhi, October 16, 2026: The Ministry of Defence is likely to suspend business dealings with private defence manufacturer SMPP Limited following the arrest of its CEO and promoter-director Ashish Kansal by the Central Bureau of Investigation (CBI) in an alleged bribery case linked to a ₹500-crore ammunition supply contract with Munitions India Limited (MIL). Officials familiar with the matter indicated that the Department of Defence Production is expected to decide on the action under existing procurement rules and guidelines.
The CBI registered a case on October 12, 2026, and arrested Anil Kumar, Executive Director (Operations) of state-owned MIL (headquartered in Pune), Ashish Kansal, and Kumar’s brother B Harshavardhan on October 13. The agency alleged that Kumar, in connivance with private contractors and vendors, demanded and accepted illegal gratification in exchange for official favours and for disclosing sensitive information concerning defence production, procurement, and other strategically important activities of MIL. Such unauthorised disclosure, the FIR stated, could compromise national strategic and security interests and undermine the integrity of defence procurement processes.
SMPP had been awarded a ₹500-crore contract for the supply of ammunition to MIL over a one-year period. The FIR noted that Kansal maintained regular contact with Kumar in connection with this contract. An SMPP employee, Ravit Kumar Tewatia, was also named. The agency further alleged that Kumar routed and parked substantial portions of the illicit proceeds through his wife Chetnashri, his brother Harshavardhan, and other relatives. According to one report, a tip-off regarding a large hawala delivery late at night to Kumar’s Pune residence led investigators to intercept approximately ₹1.7 crore and trace the chain of intermediaries back to Kansal.
During searches, the CBI recovered ₹1.73 crore in cash from Kumar’s premises in Pune. Additional searches at premises linked to the accused in Mysuru, Bengaluru, and Delhi yielded approximately ₹50 lakh in cash and incriminating documents, taking the total cash seizure to around ₹2.23 crore. The three accused were remanded in CBI custody till October 19 by a special court in Pune. The Defence Ministry has already suspended Anil Kumar with effect from October 13.
Under the Defence Procurement Manual 2025 and the Ministry of Defence Guidelines for Penalties in Business Dealings with Entities, the competent authority may impose financial penalties and/or suspend or ban business dealings with an entity that resorts to corrupt practices, unfair means, or illegal activities at any stage to secure a contract (even where a Pre-Contract Integrity Pact is not mandated).
Suspension can be ordered pending a full inquiry, when a complaint is referred to the CBI or another investigating agency, or upon intimation of the initiation of a criminal investigation or inquiry. An order of suspension results in immediate ineligibility of the entity from participating in future bids; no Request for Proposal is issued to it.
The suspension may extend to allied firms, and in the case of joint ventures or consortiums, partners may also be deemed suspended. The period of suspension ordinarily does not exceed one year (with some reports citing an initial six-month period under newer guidelines, extendable by the concerned secretary). Longer action is possible in exceptional cases involving national security. Suspended entities may still participate in future RFPs for spares, upgrades, and maintenance of proprietary equipment they earlier supplied, if no alternative sources are available.
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 diversified into defence production, manufacturing 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 significant 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. It has also undertaken export orders.
Ashish Kansal, who has been associated with the company since 2003 and was appointed Whole-time Director and CEO with effect from August 17, 2024, 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 as of the latest reports. The CBI investigation is continuing, and the agency is examining other contracts handled by Anil Kumar as well as the roles of additional individuals named in the FIR.
This development comes amid ongoing efforts to strengthen accountability and curb corruption in defence procurement following the corporatisation of the erstwhile Ordnance Factory Board, of which MIL is one of the seven resulting entities.
