NEWSBREAK

More of Bofors

Even as the Bofors case drags on, the NDA government is all set to buy more howitzers from the blacklisted Swedish company.

JOHN CHERIAN
in New Delhi

ONE of the election promises of the Bharatiya Janata Party-led National Democratic Alliance (NDA) was that it would bring to justice all those behind what had come to be known as the Bofors scandal. The NDA government, however, is now all set to buy more of the Bofors guns. It has been touting the efficacy of the field howitzers since the Kargil War two years ago. According to reports, it has added many more Bofors guns to the defence arsenal since 1999. The Swedish media reported in early October that the Indian government wanted to buy around 3,000 howitzers. Under a contract signed by the Rajiv Gandhi government in the mid-1980s India bought 410 howitzers made by the Swedish company. The deal, which allegedly involved payment of kickbacks to middlemen and political functionaries, caused a political upheaval, which forced the government to blacklist the company. Successive governments have pledged to expose and prosecute those behind the scandal.

The Bofors howitzer, during the Kargil War.

The Swedish government has introduced legislation that bars the country from exporting armaments to "countries in conflict". The Left parties and peace groups in Sweden have been saying that there is a real danger of conflict erupting between India and Pakistan. The recent statements by Indian and Pakistani leaders may have only strengthened their apprehensions. The Swedish government, however, argues that the new sales of howitzers is a "follow-up" to the original Bofors contract and should be seen as an ongoing defence deal with India.

On October 8, Dagens Nyheter, one of Sweden's most respected newspapers, broke the story of India's intention to go in for a huge purchase of the howitzers. Since then the Swedish media have been abuzz with articles and commentaries on the subject. Most of the articles are critical of the Swedish government's decision to look favourably at the proposed deal which, according to the Swedish media, is worth a whopping 15 billion Swedish crowns ($1.5 billion). Most of the parties in the Swedish Parliament support the government on this issue.

A statement from the Indian Defence Ministry said that the entire issue had been debated in Parliament and that there was no conflict of interest involved. It said: "The government in a meeting held on 15th June 1999 reviewed the ban placed on the business dealings with M/s Bofors in the light of the changed situation and inter alia approved that the embargo placed on transactions with the then M/s AB Bofors, Sweden, by the Government on 31/1/1990, need not visit the successor company, the present 'Celsius' of Sweden, which is state-controlled."

The statement, however, added that these directions "shall be without prejudice to the ongoing investigations, actions due, measures that may be entailed and reserving to Government the right to be reimbursed amounts illegitimately paid. Subsequently, three contracts for procurement of spares for 155mm FH 77 B Gun System were signed with M/s Celsius, Sweden." It added that the process of indigenisation and development of spares for the gun systems was on. So far 1,314 items of spares had been indigenised, it said.

The Swedish National Audit Bureau report on the Bofors gun deal, which is now in the public domain, explicitly states that the payments made out by Bofors are "entirely proven commission payments to companies/accounts in Switzerland in relation" to the howitzer deal with India.

Soon after assuming power, the NDA government showed signs of getting the Bofors case expedited. The Central Bureau of Investigation (CBI) has accumulated plenty of evidence against the Hinduja brothers and the other accused but it took nine years to file the first charge-sheet. The Hinduja brothers, who enjoy tremendous clout in the corridors of power in London as well as New Delhi, were arrested earlier in the year and released on bail. They had moved petitions in Swedish courts to block the transfer of crucial Swiss bank documents linking them to the Bofors scandal. The Indian government won the case and got its hands on the Swiss documents. There have been attempts to get the Italian businessman Ottavio Quattrocchi, allegedly close to the Nehru-Gandhi family, extradited to India to face trial in the case. Quattrocchi allegedly took about $7 million as commission in the deal. The elusive Win Chadha returned to India after his Indian passport expired in the United Arab Emirates. His death in the last week of October is seen as a setback to the Bofors kickback scandal. Former Defence Secretary S.K. Bhatnagar, another accused in the case, passed away some months ago. Martin Ardbo, who was the head of A.B. Bofors in the 1980s, has successfully fought off the Indian government's attempts to get him extradited to face trial in India. CBI officials say that Swedish laws prohibit the extradition of Swedish nationals and that they are trying their best to bring him to India. The government insists that it is keen to expedite the extradition of Quattrocchi and to take the case against the Hinduja brothers to its logical conclusion.

But, given the pace of the trial, few people expect a speedy resolution of the case. CBI officials admit that the deaths of Bhatnagar and Chadha and the government's inability to have Quattrocchi and Ardbo extradited have made the case legally weak. They, however, emphasise that they will continue to prosecute the case despite the delays that might be caused by the death of two of the accused. Defence counsel are also of the view that the case will be delayed owing to these deaths. They claim that despite their requests the CBI has not provided them documents that are relevant to the case. Even before Chadha died, the case was being delayed owing to frequent adjournments.

Meanwhile, Defence Minister George Fernandes has said that the government is prepared to bend rules if they come in the way of speedy acquisition of equipment for the armed forces. Addressing troops at Khajuwala on the India-Pakistan border on November 14, he said: "Certain equipment is required to act as force multipliers. I assure you that the government will bend rules, if required, to ensure speedy procurement. Though there are procedural delays, these shall not be permitted to delay the equipment from reaching the soldiers. If we have to function outside rules, we will."

After being reinducted as Defence Minister, Fernandes had said that more than 70 per cent of the funds earmarked for defence expenditure for the current financial year remained unspent. He said that he would once again put his "neck on the block" while endeavouring to ensure that the armed forces are well equipped and ready to face any eventuality.

The K. Venkataswami Commission, which has been set up to probe the Tehelka expose, is looking into some of the deals finalised during Fernandes' previous tenure as Defence Minister. The deals include the purchase of armoured recovery vehicles, Barak missiles and Krasnapol laser-guided artillery shells.