Bofors arms deal scandal
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The Bofors scandal was a major weapons-contract
political scandal In politics, a political scandal is an action or event regarded as morally or legally wrong and causing general public outrage. Politicians, government officials, party officials and lobbyists can be accused of various illegal, corrupt, unethic ...
that occurred between
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
and
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during the 1980s and 1990s, initiated by
Indian National Congress The Indian National Congress (INC), colloquially the Congress Party but often simply the Congress, is a political party in India with widespread roots. Founded in 1885, it was the first modern nationalist movement to emerge in the British Em ...
politicians and implicating the Indian prime minister,
Rajiv Gandhi Rajiv Gandhi (; 20 August 1944 – 21 May 1991) was an Indian politician who served as the sixth prime minister of India from 1984 to 1989. He took office after the 1984 assassination of his mother, then Prime Minister Indira Gandhi, to beco ...
, and several other members of the Indian and Swedish governments who were accused of receiving kickbacks from Bofors AB, an arms manufacturer principally financed by the Wallenberg family's
Skandinaviska Enskilda Banken Skandinaviska Enskilda Banken AB (, abbreviated SEB, is a northern European financial services group headquartered in Stockholm, Sweden. In Sweden and the Baltic countries, SEB has a full financial service offering. In Denmark, Finland, Norway, ...
, for winning a bid to supply to India their 155 mm field howitzer. The scandal relates to illegal kickbacks paid in a US$1.4-billion deal between the Swedish arms manufacturer Bofors with the
government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
for the sale of 410 field howitzer guns, and a supply contract almost twice that amount. It was the biggest arms deal ever in Sweden, and money marked for development projects was diverted to secure this contract at any cost. The investigations revealed flouting of rules and bypassing of institutions. On 16 April 1987, a Swedish radio station broke out a story based on a
whistleblower A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...
in the Swedish police, alleging that the reputed Swedish artillery manufacturer Bofors had paid kickbacks to people in several countries, including Sweden and India, to secure a contract. This had been done the previous year for a deal to supply 410 155 mm calibre howitzer guns for the Indian army. However, none of the newspapers in India were aware of this. In May 1987, a broadcast by a Swedish radio station revealed that bribes of had been paid by Bofors to Indian politicians, members of the Congress party and bureaucrats. This was picked up by a young journalist from ''
The Hindu ''The Hindu'' is an Indian English-language daily newspaper owned by The Hindu Group, headquartered in Chennai, Tamil Nadu. It began as a weekly in 1878 and became a daily in 1889. It is one of the Indian newspapers of record and the secon ...
'', Chitra Subramaniam, who happened to be in Sweden at that time, covering another story. The scale of the corruption was far worse than any that Sweden and India had seen before and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections. The Swedish company paid in kickbacks to top Indian politicians and key defence officials. The case came into light during
Vishwanath Pratap Singh Vishwanath Pratap Singh (25 June 1931 – 27 November 2008), shortened to V. P. Singh, was an Indian politician who was the 7th Prime Minister of India from 1989 to 1990 and the 41st Raja Bahadur of Manda. He is India's only prime minister to ...
's tenure as defence minister, and was revealed through investigative journalism tipped off by a
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news revelation on Swedish radio, followed up by a team led by
N. Ram Narasimhan Ram (born 4 May 1945) is an Indian journalist and a prominent member of the Kasturi family that controls The Hindu Group of publications. Ram was the managing-director of ''The Hindu'' since 1977 and its editor-in-chief since 27 Ju ...
of the newspaper ''
The Hindu ''The Hindu'' is an Indian English-language daily newspaper owned by The Hindu Group, headquartered in Chennai, Tamil Nadu. It began as a weekly in 1878 and became a daily in 1889. It is one of the Indian newspapers of record and the secon ...
''. The journalist who secured the over 350 documents that detailed the payoffs was Chitra Subramaniam reporting for ''The Hindu''. Later the articles were published in ''
The Indian Express ''The Indian Express'' is an English-language Indian daily newspaper founded in 1932. It is published in Mumbai by the Indian Express Group. In 1999, eight years after the group's founder Ramnath Goenka's death in 1991, the group was split betw ...
'' and ''
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'' when ''The Hindu'' stopped publishing stories about the Bofors scandal under immense government pressure and Chitra Subramaniam moved to the two newspapers. In an interview with her, published in ''The Hoot'' in April 2012 on the 25th anniversary of the revelations, Sten Lindstrom, former chief of Swedish police, discussed why he leaked the documents to her and the role of whistle-blowers in a democracy.


Chronology of events and investigation

March 24, 1986 - A $285 million contract between the
Government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
and Swedish arms company Bofors was signed for supply of 410 155 mm Howitzer field guns. April 16, 1987 -
Swedish Radio Sveriges Radio AB (, "Sweden's Radio") is Sweden's national publicly funded radio broadcaster. Sveriges Radio is a public limited company, owned by an independent foundation, previously funded through a licensing fee, the level of which is ...
alleged that Bofors paid kickbacks to people from a number of countries including top Swedish and Indian politicians and key defence officials to seal the deal. 1987 - As a result of the revelations, the Indian government
blacklisted Blacklisting is the action of a group or authority compiling a blacklist (or black list) of people, countries or other entities to be avoided or distrusted as being deemed unacceptable to those making the list. If someone is on a blacklist, t ...
Bofors, preventing the company from doing business in India.Past still haunts defence ministry
/ref> The middleman associated with the scandal was
Ottavio Quattrocchi Ottavio Quattrocchi (1938 – 13 July 2013) was an Italian businessman who was being sought until early 2009 in India for criminal charges for acting as a conduit for bribes in the Bofors scandal. Quattrocchi's role in this scandal, and his prox ...
, an Italian businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was reportedly close to the family of Rajiv Gandhi and emerged as a powerful broker in the 1980s between big businesses and the Indian government. May 21, 1991 - While the case was being investigated, Rajiv Gandhi was assassinated for unrelated reasons by the
LTTE The Liberation Tigers of Tamil Eelam (LTTE; ta, தமிழீழ விடுதலைப் புலிகள், translit=Tamiḻīḻa viṭutalaip pulikaḷ, si, දෙමළ ඊළාම් විමුක්ති කොටි, t ...
. 1997 - The
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released some 500 documents after years of legal battle. 1999 - The Indian government lifted its ban on Bofors. The lifting of the ban came during the
Kargil War The Kargil War, also known as the Kargil conflict, was fought between India and Pakistan from May to July 1999 in the Kargil district of Jammu and Kashmir and elsewhere along the Line of Control (LoC). In India, the conflict is also referr ...
, when the Bofors guns proved to be efficient but were crippled by a shortage of spare parts. October 22, 1999 - When
National Democratic Alliance National Democratic Alliance (NDA) () is a Centre-right politics, centre-right to Right-wing politics, right-wing and Conservatism, conservative Indian big tent political alliance led by the right-wing Bharatiya Janata Party (BJP). It was foun ...
government led by the
Bharatiya Janata Party The Bharatiya Janata Party (BJP; ; ) is a political party in India, and one of the two major Indian political parties alongside the Indian National Congress. Since 2014, it has been the ruling political party in India under Narendra Modi ...
was in power, the
Central Bureau of Investigation The Central Bureau of Investigation (CBI) is the premier investigating agency of India. It operates under the jurisdiction of the Ministry of Personnel, Public Grievances and Pensions. Originally set up to investigate bribery and governmen ...
(CBI) filed the first
chargesheet In policing on the Indian subcontinent, a chargesheet is prepared after First Information Reports (FIRs), and charges an individual for (some or all of) the crimes specified in those FIR(s). Once the charge sheet has been submitted to a court ...
against Quattrocchi, Win Chadha,
Rajiv Gandhi Rajiv Gandhi (; 20 August 1944 – 21 May 1991) was an Indian politician who served as the sixth prime minister of India from 1984 to 1989. He took office after the 1984 assassination of his mother, then Prime Minister Indira Gandhi, to beco ...
, the defence secretary S. K. Bhatnagar and a number of others. 2001 - Win Chadha and S. K. Bhatnagar died. June 10, 2002 -
Delhi High Court The High Court of Delhi (IAST: ''dillī uchcha nyāyālaya'') was established on 31 October 1966, through the ''Delhi High Court Act, 1966'', with four judges, Chief Justice K. S. Hegde, Justice I. D. Dua, Justice H. R. Khanna and Justice S. ...
quashed Quashed (foaled 1932) was a British-bred and British-trained racehorse, winner of The Oaks in 1935. For many years, the Verdict family was not accepted into the British Stud Book because Quashed's dam was effectively a half-bred and it was n ...
all proceedings in the case so far. However, this was reversed by
Supreme Court of India The Supreme Court of India ( IAST: ) is the supreme judicial authority of India and is the highest court of the Republic of India under the constitution. It is the most senior constitutional court, has the final decision in all legal matters ...
on 7 July 2003. 2004 - The central government changed and
Indian National Congress The Indian National Congress (INC), colloquially the Congress Party but often simply the Congress, is a political party in India with widespread roots. Founded in 1885, it was the first modern nationalist movement to emerge in the British Em ...
came to power after
2004 Lok Sabha elections General elections were held in India in four phases between 20 April and 10 May 2004. Over 670 million people were eligible to vote, electing 543 members of the 14th Lok Sabha. Seven states also held assembly elections to elect state governme ...
. On 5 February 2004, the
Delhi High Court The High Court of Delhi (IAST: ''dillī uchcha nyāyālaya'') was established on 31 October 1966, through the ''Delhi High Court Act, 1966'', with four judges, Chief Justice K. S. Hegde, Justice I. D. Dua, Justice H. R. Khanna and Justice S. ...
quashed the charges of
bribery Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
against Rajiv Gandhi and others. May 31, 2005 - The
Delhi High Court The High Court of Delhi (IAST: ''dillī uchcha nyāyālaya'') was established on 31 October 1966, through the ''Delhi High Court Act, 1966'', with four judges, Chief Justice K. S. Hegde, Justice I. D. Dua, Justice H. R. Khanna and Justice S. ...
dismissed the allegations against the British business brothers, Srichand, Gopichand and
Prakash Hinduja Prakash Parmanand Hinduja ( Sindhi: پرڪاش ھندوجا) (born June 1945) is an Indian-born Swiss businessman, the chairman of the Hinduja Group in Europe. Early life Prakash Parmanand Hinduja was born in June 1945, the son of Parmanand H ...
, but charges against others remained. December 2005 - B. Daat, the
Additional Solicitor General of India Additional Solicitor General of India abbreviated as Addl. SGI is a law officer of India who assists the Solicitor-General and the Attorney-General. Addl. SGI is governed by ''Law Officers (Conditions of Service) Rules, 1987''. List of incumben ...
, acting on behalf of the Indian Government and the CBI, requested the
British Government ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal Arms , date_es ...
that two British bank accounts of Quattrocchi be unfrozen on the grounds of insufficient evidence to link these accounts to the Bofors payoff. The two accounts, containing €3 million and $1 million, had been frozen. On 16 January, the Indian Supreme Court directed the Indian government to ensure that Ottavio Quattrocchi did not withdraw money from the two bank accounts in London. The CBI, the Indian federal law enforcement agency, on 23 January 2006 admitted that roughly ₹210 million, about US$4.6 million, in the two accounts have already been withdrawn by the accused. The British government released the funds later. January 16, 2006 - CBI claimed in an affidavit filed before the Supreme Court that they were still pursuing extradition orders for Quattrocchi. The
Interpol The International Criminal Police Organization (ICPO; french: link=no, Organisation internationale de police criminelle), commonly known as Interpol ( , ), is an international organization that facilitates worldwide police cooperation and cri ...
, at the request of the CBI, has a long-standing red corner notice to arrest Quattrocchi. 6 February 2007 - Quattrocchi was detained in
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
on 6 February 2007, but the news of his detention was released by the CBI only on 23 February. Quattrocchi was released by Argentinian police. However, his
passport A passport is an official travel document issued by a government that contains a person's identity. A person with a passport can travel to and from foreign countries more easily and access consular assistance. A passport certifies the personal ...
was impounded and he was not allowed to leave the country. As there was no extradition treaty between India and Argentina, the case was presented in the Argentine Supreme Court. The government of India lost the extradition case as the government of India did not provide a key court order which was the basis of Quattrocchi's arrest. In the aftermath, the government did not appeal this decision because of delays in securing an official English translation of the court's decision. March 4, 2011 - A Delhi court provided temporary relief to Quattrocchi from the case, for lack of sufficient evidence against him. July 12, 2013 - Quattrochi died of
heart attack A myocardial infarction (MI), commonly known as a heart attack, occurs when blood flow decreases or stops to the coronary artery of the heart, causing damage to the heart muscle. The most common symptom is chest pain or discomfort which may tr ...
in
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. Despite the controversy, the Bofors gun was used extensively as the primary field artillery during the
Kargil War The Kargil War, also known as the Kargil conflict, was fought between India and Pakistan from May to July 1999 in the Kargil district of Jammu and Kashmir and elsewhere along the Line of Control (LoC). In India, the conflict is also referr ...
with
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
and gave India 'an edge' against Pakistan according to battlefield commanders. In his book, ''Unknown Facets of Rajiv Gandhi, Jyoti Basu and Indrajit Gupta'', released in November 2013, former CBI director Dr A P Mukherjee wrote that Rajiv Gandhi wanted commission paid by defence suppliers to be used exclusively for the purpose of meeting expenses of running the Congress party. Mukherjee said Gandhi explained his position in a meeting on 19 June 1989, during a meeting between the two at the Prime Minister's residence. However, as per Sten Lindstrom, the former head of Swedish police, who led the investigations, they did not find anything to suggest that payments had been received by Rajiv Gandhi. He was, however, guilty of knowing about the kickbacks and not taking action on them.


Political effects

The Bofors scandal was a major issue that was highlighted in subsequent elections, which led to the Congress losing power. Though it was widely believed that V. P. Singh resigned from Rajiv Gandhi's cabinet due to the Bofors scandal, Singh clarified that he had resigned due to differences in the cabinet in commissions taken by Indian agents in the HDW submarine deal (Shishumar class).


Middlemen in Indian arms deals

Middlemen were employed in arms deals in India, both during the
British Raj The British Raj (; from Hindi ''rāj'': kingdom, realm, state, or empire) was the rule of the British Crown on the Indian subcontinent; * * it is also called Crown rule in India, * * * * or Direct rule in India, * Quote: "Mill, who was himsel ...
as well as in independent India, and commissions were paid to them under various headings and guises. Some of these were paid as personal bribes while others were paid as contributions to political parties. This led to high levels of corruption, and payments being made to politicians, bureaucrats and defence personnel to influence decisions. The political controversies caused by the Bofors Scandal, led to the banning of middlemen in arms deals. In 2015, the Government of India under the
Narendra Modi Narendra Damodardas Modi (; born 17 September 1950) is an Indian politician serving as the 14th and current Prime Minister of India since 2014. Modi was the Chief Minister of Gujarat from 2001 to 2014 and is the Member of Parliament from ...
government made the use of middlemen in arms deals legal, if they called themselves "company representatives". The then defence minister Manohar Parrikar announced that in such cases, middlemen would be paid by the government for fixing arms deals under the name of "legal fees".


Allegations against CBI

CBI has been criticised by experts, social workers, political parties and people at large for the manner in which it has handled this case. Some points to be noted: *Delay in lodging an
FIR Firs (''Abies'') are a genus of 48–56 species of evergreen coniferous trees in the family (biology), family Pinaceae. They are found on mountains throughout much of North America, North and Central America, Europe, Asia, and North Africa. The ...
*Delay in sending letter rogatories *Not appealing against the judgement of the
Delhi High Court The High Court of Delhi (IAST: ''dillī uchcha nyāyālaya'') was established on 31 October 1966, through the ''Delhi High Court Act, 1966'', with four judges, Chief Justice K. S. Hegde, Justice I. D. Dua, Justice H. R. Khanna and Justice S. ...
in 2004 *De-freezing of Quattrocchi's bank account in London by saying to the Crown Prosecutor that there is no case against Quattrocchi *Putting up a very weak case for Quattrocchi's extradition from Argentina. Subsequently, no appeal against lower court's verdict *The withdrawal of the
Interpol The International Criminal Police Organization (ICPO; french: link=no, Organisation internationale de police criminelle), commonly known as Interpol ( , ), is an international organization that facilitates worldwide police cooperation and cri ...
Red Corner notice *Finally, withdrawal of its case against Quattrocchi. Reacting to this, Chief Metropolitan Magistrate Vinod Yadav said that, ''"I agree that there are certain malafide intentions in the case and there is no doubt in that"''


Closure

The closure of Bofors case was full of twists and turns. In 2004, Delhi High Court posthumously gave clean chit to Rajiv Gandhi and said that there was no case of corruption against him or any public servant. This judgement stunned CBI as it had pursued the case for 14 years and was a setback to NDA government headed by
Atal Bihari Vajpayee Atal Bihari Vajpayee (; 25 December 1924 – 16 August 2018) was an Indian politician who served three terms as the 10th prime minister of India, first for a term of 13 days in 1996, then for a period of 13 months fr ...
as well. However, CBI said that it would contest the judgement in Supreme Court. In 2011, a Delhi court allowed CBI to close the case. Thereafter in 2012, Swedish police chief Sten Lindstrom who led the investigations and identified himself as the
whistleblower A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...
, said that Rajiv Gandhi had done nothing wrong and also cleared Bollywood actor
Amitabh Bachchan Amitabh Bachchan (; born as Amitabh Shrivastav; 11 October 1942) is an Indian actor, film producer, television host, occasional playback singer and former politician known for his work in Hindi cinema. He is regarded as one of the most succe ...
and his family from any involvement in the scandal. Instead, he accused Swedish government of diverting funds marked for development projects to secure the deal by flouting the rules and bypassing the institutions.Bofors arms deal: 'No evidence Rajiv Gandhi took bribe'
BBC, April 25, 2012.


See also

*
H. R. Bhardwaj Hansraj Bhardwaj (16 May 1939 – 8 March 2020) was an Indian politician who was Governor of Karnataka from 2009 to 2014; he also served as Governor of Kerala from 2012 until 2013. He was a member of the Indian National Congress. He holds the rec ...
* Justice Ajit Bharihoke, the special CBI court judge in whose court the case was argued. * Corruption in India *
Corruption Perceptions Index The Corruption Perceptions Index (CPI) is an index which ranks countries "by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as an "abuse of entru ...
* List of scandals in India * Jan Lokpal Bill * Jeep scandal case 1948


References


Further reading

* Arun Shourie (1992). These lethal, inexorable laws: Rajiv, his men and his regime. Delhi: South Asia Books.


External links


Indian Express article on CBI's handling of the Bofors scam under NDA and UPA

Bofors resurrects, gives more ammo to BJP

Death Of A Scandal – Bofors, India's Watergate

Lecture by an IMF aid projects manager about government bribery
{{DEFAULTSORT:Bofors Scandal 20th-century scandals Cover-ups Criminal investigation Confidence tricks Political scandals in Sweden Political scandals in India Bofors Rajiv Gandhi administration Military scandals Weapons trade 1980s in India 1990s in India 1980s in Sweden Corruption in defence procurement in India India–Sweden relations Bribery scandals