India, Oct. 15 -- SMPP Limited, whose CEO was arrested by the Central Bureau of Investigation (CBI) in an alleged bribery case on Wednesday along with two others, faces possible suspension or a ban on government business dealings by the defence ministry under the government's rules for procuring weapons and systems, officials aware of the matter said on Thursday.

SMPP CEO Ashish Kansal, state-owned Munitions India Limited executive director Anil Kumar and his brother B Harshavardhan were held in an alleged bribery case linked to a Rs.500-crore ammunition deal.

The department of defence production is expected to decide what action to take against SMPP, the officials added, asking not to be named. It manufactures ammunition, loitering mun...