Originally conceived in the late 1990s when George Fernandes was the defence minister, the Nalanda factory went into limbo when South African defence major Denel that was to collaborate in its construction was blacklisted on corruption charges.

The factory was to manufacture the propellant for the ammunition of the Bofors 155 mm howitzers and also Zitara carbines in collaboration with another Indian ordnance factory.

A review committee report in July 2007 gave the go-ahead to the project and it was finally approved by the government in January 2009.

All dealings with IMI were put on hold June 5 after its name surfaced in the bribery case against the retired chairman.

The CBI registered a case against Ghosh May 17.