Analysis | Bofors | Scandal 1987 | 15th July 2022 | Virtual Wire
The Indian politics is a paradise contingency hub of incidents which is always ready to offer its students plentiful incidents, but only one condition is the student has to be eager enough to study and do detailed research.
One of the Incidents or rather an unexpected scandal that shook the nation at one point was the Bofors Scandal. It was mainly a major weapons-contract political scandal that occurred in 1987. This scandal was mainly believed to be initiated by the Indian National Congress Party and the then Prime Minister Rajiv Gandhi, along with other members of the Indian Cabinet and Swedish Government who were accused of receiving bribes (kickbacks) from Bofors AB, an arms manufacturer principally financed by the Wallenberg family’s Skandinaviska Enskilda Banken, for winning a bid to supply India the 155mm field Howitzer although Rajiv Gandhi was given a clean chit after investigations and the case against the rest had to be dropped on account of them passing away.
The scandal relates to an illegal bribe of a US$1.4 billion deal between the Swedish arms manufacturer Bofors with the Government of India for the sale of 410 field Howitzer guns, and a supply contract of almost twice that amount. It was considered one of the biggest arms deals in Sweden and the state finances were diverted to meet the order at any cost. The deal had bypassed all the Institutional laws and regulations. It even caused Rajiv Gandhi to lose the 1989 Lok Sabha elections and V.P Singh won it.
Rajiv Ratna Gandhi (20 August 1944 – 21 May 1991) was an Indian politician who served as the sixth prime minister of India from 1984 to 1989. He took office after the 1984 assassination of his mother, then Prime Minister Indira Gandhi, to become the youngest Indian Prime minister at the age of 40. Gandhi was from the politically powerful Nehru–Gandhi family, which had been associated with the Indian National Congress party. For much of his childhood, his maternal grandfather Jawaharlal Nehru was prime minister. Gandhi attended college in the United Kingdom. He returned to India in 1966 and became a professional pilot for long-drawn calibre state-owned Indian Airlines. In 1968, he married Sonia Gandhi; the couple settled in Delhi to a domestic life with their children Rahul Gandhi and Priyanka Gandhi Vadra. For much of the 1970s, his mother Indira Gandhi was prime minister and his brother Sanjay Gandhi an MP; despite this, Rajiv Gandhi remained apolitical. After Sanjay's death in a plane crash in 1980, Gandhi reluctantly entered politics at the behest of Indira.
It was on 16th April that the news was broken by a Swedish Radio Station based on information received from a whistleblower in the Swedish Police, alleging that the reputed Swedish artillery manufacturer Bofors had paid a lump sum bribe to the administration of various countries including India and Sweden to secure the 15 Billion rupee contract (US$ 2.3 Billion). It was done with a long drawn plan to finalize the deal of supplying 410 155mm caliber Howitzer guns for the Indian Army. This incident was not known to any of the Indian Media House. The news was picked up by Chitra Subhramanium a reporter of THE HINDU that Rupee 600 Million (US$ 91 million by 2020 standards) had been paid to the Indian Government for finalizing the deal. It was a huge-scale scandal.
The Wallenberg Foundations refers collectively to the 16 public and private foundations formed on the basis of donations from members of the Swedish Wallenberg family, or created with funds raised in honour of Wallenberg family members. The Foundations award grants to excellent researchers and research projects whose purpose is for the benefit of Sweden. Over the past ten years, the Foundations have awarded funding of just over SEK 17 billion. Total funding since the Foundations were established is approaching SEK 33 billion. The three largest foundations were awarded SEK 2.2 billion in 2018. The emphasis of funding is on medicine, technology and natural sciences, but the Foundations also support social sciences, the humanities and archaeology.
It was a period when Vishwanath Pratap Singh was assigned the role of the defence ministry, in fact, he resigned from his post after the Scandal got published in the Indian media. The HINDU newspaper had to face tremendous pressure from the Government after which it had to stop publishing the articles, later the Research Report by N.Ram of HINDU and his team was published in other Newspapers like the Statesman. Chitraji was able to secure about 350 documents from the Whistleblower Sten Lindstrom.
Chitra Subhramanium Duella is an Indian journalist. She is recognized in India
for her investigation of the Bofors-India Howitzer deal (Bofors Scandal) which is
widely believed to have contributed to the electoral defeat of the former prime
Minister Rajiv Gandhi in 1989. She founded CSD consulting, a Geneva-based
specialised consultancy working in the area of public health, trade policy, development directions and media. She is also the co-founder and Managing Editor of The News Minute – an online news website. She was an Editorial Adviser for Republic TV of Arnab Goswami. In 1989, she was honoured with
the Chameli Devi Jain Award for Outstanding Women Media person.
On 24th March a 235 million dollar deal was signed between the Indian Government and the Swedish Government where the Arms company agreed to supply 410 155mm Howitzer field guns. It was not before 16th April 1987 that the Swedish radio announced on the basis of the Information received from Sten Lindstrom that Bofors company had paid a handsome kickback to the Indian Administration and the middlemen to get the deal finalized
by the Rajiv Gandhi Government. Once the news of bribery came in the Indian media the Bofors company was blacklisted and the deals were cancelled. The middleman who was close to the Gandhi family Ottavio Quattrocchi was an Italian businessman who acted as a representative of Snamprogetti a petrochemicals firm.
However, the most striking feature of the case was that most of the accused passed away following which the case had to be dissolved. On 21st May 1991, Rajiv Gandhi was assassinated by the LTTE on account of the Sri Lanka invasion by the Indian army. In 1999 a charge sheet was filed by CBI under the leadership of the Bharatiya Janata Party. The Government was led by Shri Atal Bihari Vajpayee. The charge sheet had the name of late Prime Minister Shri Rajiv Gandhi , the defence secretary S.K. Bhatnagar and Quattrocchi among others. While the Scam investigation was going on Win Chadda and Mr. Bhatnagar passed away in 2001. In 2002 Delhi High court gave a clean chit to all the accused but this judgement was reversed by the Supreme court on CBI appeal in 2003 where further investigations were ordered by the apex court. In 2004 there was a change of power from NDA to UPA, with the Rajiv Gandhi getting a clean chit from the Delhi High court, the exact statement made by the Judge was –“CBI could not find even a scintillation of proof that Mr. Rajiv Gandhi had taken the money in person on account of the Bofors Scandal”. This verdict was really a shocker for the NDA alliance. In 2005 Srichand, Gopichand and Prakash Hinduja were proved innocent by the Delhi High Court., but the charges against others remained.
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 proximity to Indian prime minister Rajiv Gandhi through his wife Sonia Gandhi, are thought to have contributed to the defeat of the Congress Party in the 1989 elections. In 1999, the Central Bureau of Investigation (CBI) named Quattrocchi in a charge sheet as the conduit for the Bofors bribe. The case against him was strengthened in June 2003, when Interpol revealed two bank accounts, 5A5151516M and 5A5151516L, held by Quattrocchi and his wife Maria with the BSI AG bank, London, containing Euros 3 million and $1 million, a "curiously large savings for a salaried executive".
S. K. Bhatnagar (June 1, 1930 – August 4, 2001) was a former defence secretary of
India. He was a key figure for those accused in the scandal. He was one of the persons to have been questioned first by the CBI after registering the First Information Report (FIR) in the Bofors pay-off case in January 1990. He was accused of abusing his official authority as the then Defence Secretary to tilt the scales in favour of the Swedish firm for the Rs. 1437-crore contract to supply 155 mm howitzer guns to the Indian Army. The contract with the Government was signed on March 24, 1986, when Rajiv Gandhi was the Prime Minister of India. He was later made governor of Sikkim. He died in 2001 at the age of 71.
Win Chadda (born 1924, d. 2001) was one of the primary figures in the Rs 640
million Bofors scandal. An agent of Swedish arms manufacturer A B Bofors,
Chadda was charged by the CBI in 1999 along with former defence secretary S K
Bhatnagar, Kuala Lumpur-based Italian businessman Ottavio Quattrocchi, former
Bofors chief Martin Ardbo and the company itself. Chadda was charge-sheeted with receiving some of the Rs 640 million kickback in the Rs 14.37 billion deal signed in March 1986 by the Rajiv Gandhi government for the supply of 410 155mm Howitzer field guns to India. He died of a cardiac arrest on 24 October 2001. He was suffering from diabetes, blood pressure and heart disease.
Srichand Parmanand Hinduja (born 28 November 1935) is an Indian-born British billionaire businessman, investor and philanthropist. He is the primary shareholder and chairman of the Hinduja Group of companies. As of May 2020, together with his brother Gopichand, he is the UK's richest man. Since the 1990s, he has been consistently ranked among the UK and Asia's wealthiest people. In 2022, Hinduja topped the Sunday Times Rich List with an estimated wealth of GBP 28.472 billion. Based on the rich list compiled by Asian Media & Marketing Group, Hinduja's wealth is estimated at GBP 25.2 billion ($31.7 billion). The Forbes List in March 2019 ranked
him and his brother GP as the world's 65th richest billionaire family with an estimated wealth of $16.9 billion.
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 have been former royalty. He was educated at Allahabad University and Fergusson College in Pune. In 1969, he joined the Indian National Congress party and was elected as a member of the Uttar Pradesh Legislative Assembly. In 1971, he became a Member of Parliament in the Lok Sabha. He served as the Minister of Commerce from 1976 to 1977. In 1980, he became the Chief Minister of Uttar Pradesh known for his encounter with the gang of Phoolan Devi. In Rajiv Gandhi's ministry, Singh was given various cabinet posts, including Minister of Finance and Minister of Defence. Singh was also the Leader of the Rajya Sabha from 1984 to 1987. During his tenure as Minister of Defence, the Bofors scandal came to light, and Singh resigned from the ministry.
In December 2005 B.Daat the additional Solicitor General of India made a request to the British government to unfreeze the two accounts of Ottavio Quattrocchi such that they can be studied for transactions regarding the Bofors Payoff. It was directed by the Indian Supreme court that the two accounts containing 1 million and 3 million dollars respectively be sealed, it was later investigated that 4.6 million dollars had already been transacted from both the accounts, and the funds were released by the British Government later on. In 2006 a special extradition order was issued by CBI and permission of allowance was asked from the Supreme court stating that a red corner notice had been issued in the name of Quattrocchi by Interpol for arresting him.
In February 2007 Quattrocchi was detained in Argentina and was presented in the Argentinean Supreme court since there was no extradition treaty between India and Argentina, Quattrocchi could not be brought to India his passport was impounded and he was not allowed to leave the country, further, it was a failure on the Indian Administration part that they could not provide the Key court orders to the Argentinean embassy on time. 2011 saw all the cases against Quattrocchi being quashed by the Delhi High Court with him passing away in 2013 in Milan.
Extradition in International Law is the process by which one state, upon the request of the other, affects the return of a person for trial for a crime punishable by the laws of the requesting state and committed outside the State of refuge. Extradition protects the interest of the territorial state by surrendering the criminals to the state where they come from. If the state removes the process of extradition then the criminals are likely to move to other states to save themselves from punishment. If a country has no extradition treaty with another, this means that if a criminal accused flees from the former to the latter then he cannot be forced to return to the former country for court appearances and trial.
However, even after all the chaos created in the country by the Bofors Scandal, the Bofors Howitzer 155mm guns were extensively used by the Indian army in the Kargil war. These guns were said to give a special edge to India in the war.
Fälthaubits 77 or FH77 is a Swedish 155 mm howitzer, developed and manufactured by Bofors. It is also colloquially known as the Bofors gun in India. There were several versions, the original (sometimes referred to as Haubits 77 A) with a 38 calibre barrel and sliding block mechanism, the export version FH77 B version with a 39 calibre barrel and an interrupted ogival screw breech. For the demonstrator of the Archer Artillery System, some FH77A were modified into FH 77 AD L/45, while the series production was FH77Bs rebuilt into FH77 BW L/52.The carriage was also used in the Swedish coastal artillery.
Saipem S.p.A. (Società Anonima Italiana Perforazioni E Montaggi lit. Drilling and Assembly Italian Public Limited Company) is an Italian multinational oilfield services company and one of the largest in the world. Until 2016 it was a subsidiary of Italian oil and gas supermajor Eni, which retains approximately 30% of Saipem's shares. In 2010, Saipem agreed to pay a penalty of US$30 million to settle a Nigerian investigation into a bribery case involving the construction of Nigeria LNG facilities. Saipem is also under trial in Italy over charges relating to the same case. In September 2018, an Italian court found Saipem and former CEO Pietro Tali, guilty of corruption over bribes in Algeria. The former CEO was sentenced to four years and nine months in prison and 197.9 million euros were seized from the company.