The move to suspend Natarajan on a CBI recommendation to ensure fair investigation came a few days after the Defence Ministry issued a show cause notice to the Chairman and Managing Director of the defence and engineering firm for slapping a defamation notice against former Army Chief Gen V K Singh without its permission.
"The Government has put the CMD of BEML V R S Natarajan under suspension following a recommendation by the CBI that he should be kept away from the post to ensure fair investigation. The CBI is currently investigating into various charges against Natarajan," Defence Ministry spokesperson Sitanshu Kar said in New Delhi.
"The charge of CMD has been given to P Dwarkanath, the senior most functional Director in BEML," he said.
The CBI had sought the permission of the Defence Ministry under section 6A of The Delhi Special Police Establishment Act which mandates permission of the central government before initiating proceedings against an official above the rank of Joint Secretary.
CBI officials received the sanction from the Defence Ministry clearing the deck for probing his alleged "individual" role in the irregularities into the deal, agency sources said in Delhi.
CBI has come across prima facie material which indicates his alleged culpability in the case and the agency will soon call him for questioning him on the basis of those documents and records, the sources said.
They said they have come across several instances where Natarajan allegedly bypassed norms and interacted directly with the supplying firms on crucial negotions without taking into confidence the Defence Ministry.
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In Bangalore, Natarajan, who has headed the defence PSU for 12 years, said he will "come out clean" in the cases against him. "I respect the Government decision and I will come out clean in this process," he said.
Gen V K Singh, who retired on May 31 after holding the post of the Army chief for over two years, had alleged in March that he was offered Rs 14 crore bribe by Lt Gen (retd) Tejinder Singh to clear supply of a tranche of 600 "sub-standard" Tatra trucks from BEML.