India's defence minister told parliament in New Delhi on July 28 that he had cancelled Denel's contract to supply 400 Anti Material Rifles (AMRs) to India.

But the South African arms company continued to insist yesterday that the Indian defence ministry had not officially informed it of the cancellation.

Defence minister Shri Pranab Mukherjee told the parliament that, based on information supplied by Denel, there was evidence that clauses covering the use of undue influence and agents or agency commissions had been violated.

The contract was reportedly worth about R24 million.

Denel spokeswoman Priya Pillay said the defence ministry had told Denel more than five months ago of its "intention to cancel" the contract, subject to the outcome of investigations.

She said Denel had not been in contact with the Indian defence ministry since July 28 to confirm Mukherjee's statement. And it had not been able to contact the ministry since the story broke in South Africa yesterday because Denel CEO Shaun Liebenberg was the only official in contact with the Indians and was out of the country.

The fate of other, more lucrative, Denel contracts with India could not be established yesterday. Denel has contracts to supply ammunition, to build an ammunition factory and to supply G6 self-propelled howitzers. These would earn Denel billions of rands, military analysts said.

The Indian government suspended all these contracts five months ago when it began investigating the AMR contract.

With acknowledgement to the Cape Argus.