This is a collection of articles archived for the excellence of their content.
The scandal of 1987
India Today, December 29, 2008
Gunjeet K. Sra
The Bofors scandal, 1987-1996: One of the biggest political scams in the country till date, involving Rs 64 crore. It was responsible for Rajiv Gandhi’s defeat in the November 1989 general elections.
Why Sweden stopped the Bofors probe
Declassified CIA Papers Resurrect Bofors Ghost
Resurrecting the Bofors ghost, a recently declassified CIA report said Sweden stopped investigations into alleged bribery in the howitzer deal in 1988 to spare former PM Rajiv Gandhi from embarrassment.This happened after Rajiv visited Stockholm that year.That payoff scandal had cost him his government.
The CIA in its secret 1988 report, titled `Sweden's Bofors Arms Scandal' said Stockholm had “called off the investigation of Bofors' bribery , probably in an effort to prevent future revelations of bribes to Indian officials that could embarrass PM Gandhi“.
“Following the national audit, Swedish police launched a separate investigation into Bofors bribery , which would have been illegal if payments were made to foreign officials. This investigation was terminated in late January 1988, following a trip by Indian PM Gandhi to Stockholm,“ the report said. “Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance,“ it added. The report listed the vari ous allegations against Bofors, saying the company allegedly bribed Indian middlemen and officials in connection with New Delhi's purchase of 155mm howitzers. The agency concluded the payments had indeed been made by Bofors officials -“either straight to Indian officials, or to middlemen who in turn paid off officials -to secure the $1.2 billion sale of howitzers“.
“Word of the payoffs leaked, sparking domestic difficulties for Indian PM Rajiv Gandhi. Stockholm wanted to save Gandhi the troubles caused him by the Swedish leak, and Nobel Industries wanted to avoid a bribery indictment.The two sides cooperated, therefore, on a scheme to keep details of the payment secret.Stockholm eventually called off the entire bribery investigation,“ the CIA report said. In addition, the report said other incidents may be related to the Bofors scandal. War material inspector Carl Algernon, the customs official responsible for monitoring arms exports, died after being struck by a subway train in January 1987. He had just met (30 minutes earlier) with Anders Carlberg, head of Bofors' parent company Nobel Industries. Algernon was a friend of Bofors directors Claes-Erik Winberg and Martin Ardbo.
The report said the police suspected suicide but murder was a possibility . Media speculation later said Algernon was killed because he threatened to expose the illegal activities of Swedish arms manufacturers. In 1987, media speculated that then PM Olof Palme was assassinated by an Iranian in retaliation to his alleged suspension of an arms shipment to Tehran.
2016: India gives Bofors a second chance
Army Will Start Induction From Mid-2017, Deal Worth $737m
The Bofors jinx has finally been broken after 30 years. After the infamous Bofors scandal of the mid-1980s torpedoed all its artillery modernisation plans, the Army will begin inducting its first modern 155mm howitzers from mid-2017 onwards.
Defence ministry sources said in Nov 2016 that the cabinet committee on security , chaired by PM Narendra Modi, has cleared the acquisition of 145 M-777 ultra-light howitzers from the US in a government-to-government deal worth $737 million (almost Rs 5,000 crore).
The M-777 deal, which has a 30% offset clause, will now be inked within the next two to three weeks. “The Pentagon's letter of offer and acceptance (LoA) to India is valid till November 20, but it can be extended for another 10-15 days,“ said a source. TOI had earlier reported that the LoA for the M-777 deal, which the two governments have been negotiating since 2009-2010, had expired once again on November 7.There was a scramble by the two sides after that to extend the LoA's validity.
Interestingly, the M-777 howitzers are manufactured by BAE Systems, which now owns the original Swedish Bofors company .
Of the 145 M-777 howitzers, 120 will be “assembled, integrated and tested“ in India with BAE Systems selecting Mahindra as its business partner here. The first two howitzers will be delivered within six months of the contract being inked, with the others to follow at the rate of two per month.
2018: AG advises against CBI appeal
2018, The AG advised against CBI appeal in the Bofors case
In a major setback to efforts to reopen the Bofors payoff case that brought down the Rajiv Gandhi . government in the 1989 election and long remained a political albatross for Congress, attorney general K K Venugopal has advised against the CBI filing a special leave petition in the Supreme Court.
The government’s top law officer said that as more than 12 years had lapsed since the acquittal of key Bofors accused by the Delhi high court, any appeal by the CBI was likely to fail on account of delay itself. He also pointed to lack of circumstances to condone the long delay. After the May 2005 HC ruling, the UPA government and the then AG had decided not to file an appeal against the verdict that acquitted the Hinduja brothers in the Bofors bribery case. The CBI, which had wanted to appeal, “changed” its mind. The UPA was in office till May 2014.
Bofors case revived by pvt persons’ appeal in SC
The Bofors case gathered fresh traction with private persons approaching the SC seeking to file a criminal appeal against the Delhi HC order. The matter was also taken up by the Public Accounts Committee of Parliament which asked the CBI and the department of personnel and training to state its opinion. BJP MPs raised the issue in Parliament as well.
Now, according to documents understood to be with the PAC, AG K K Venugopal has advised, “Any SLP filed before the Supreme Court at this stage, in my view, is likely to be dismissed by the court on account of long delay itself. The record does not reveal any significant events or special circumstances which could be said to constitute sufficient cause for not approaching the SC within the 90 days permitted.”
He said the CBI could still present its views in the petition in the SC but the possibility of a fresh probe was uncertain as the court had noted that a “third party” did not have a locus standi. Venugopal also ticked off the government for not taking a view earlier even after the previous delay. “It is worth noting that the present government has been in position for more than three years now. In the circumstances, the long delay in approaching court will be difficult to satisfactorily explain to court,” he said.
The top law officer did hold out some hope of the CBI making a case for the need or scope for further investigation, noting that the agency was a respondent in the case filed by petitioners Ajay Kumar Aggrawal and Raj Kumar Pandey in the SC. “Thus, the matter is still live, and the opportunity for the CBI to present its case before the SC is not entirely lost,” the AG said.
Venugopal said the CBI canvassing its stand as a respondent would be better than risking filing an SLP on it own as a dismissal would be a loss of face for the agency and result in political embarrassment for the Modi regime. “A dismissal of SLP could well prejudice its stand as a respondent in appeals pending in the SC,” he said.
The investigation into the Bofors scandal was hit by several political and legal roadblocks after a Swedish radio first aired the allegations in 1987. The probe progressed slightly when Congress was replaced by the National Front government in 1989. But Congress’s return to office in 1991 saw the brakes being applied once again. The then foreign minister, Madhavsinh Solanki, was forced to resign after it came to light that he had handed over an unsigned note to Swiss authorities seeking to thwart a probe into payoffs to secret accounts.
When the Atal regime took over, CBI came close to nabbing Italian businessman Ottavio Quattrocchi, who was supposed to be the conduit for the payment of kickbacks, in Malaysia but he took advantage of a weekend when courts were closed to slip out. One of the early decisions of the Manmohan government was to de-freeze Quattrocchi’s UK accounts and let him withdraw 3 million euros and $1 million of the suspected slush funds.
Bofors PAC finds holes in report filed in 1989
The infamous Bofors scandal of the mid-1980s, which brought down the Rajiv Gandhi government, continues to create ripples. A subcommittee of the parliamentary public accounts committee (PAC) has asked the CBI to swiftly probe all ongoing cases related to the Bofors howitzers contract “without fear or favour,” while slamming the defence ministry for its laxity in the entire matter.
The report, which was adopted on by the sub-committee on Wednesday, said action taken notes on five of the nine paragraphs of audit objections in the 1989 CAG report were still pending 28 years after the report was presented to the Parliament. The report will be considered by the full PAC but it is unusual for the report by a sub-committee to be altered or rejected.
“The committee is distraught to note that the MoD showed unparalleled audacity to brazenly admit to failing to trace the files dealing with the subject, which manifests its callousness towards such sensitive matter of public propriety,” said the report, adding that the entire matter was “conveniently kept on the backburner” by the ministry.
The politically-controversial Joint Parliamentary Committee, which examined the contractual aspects of the purchase of the Bofors howitzers and submitted its report in April 1988, concluded that no irregularities could be proven beyond doubt. But the CAG report a year later raised several issues, “the majority of which have not been satisfactorily answered” by the MoD, said the sub-committee.