Guns Came, Money Disappeared, Case Closed  (Bofors Scam)

Author -Haripriya Rajendra Tiwari (Reshma), Adv. Balasaheb Apte College of Law

Justice delayed, denied… or just deleted?

An Indian politician and aviator, Rajiv Gandhi (20 August 1944 – 21 May 1991) served as the prime minister of India from 1984 to 1989. After the tragic assassination of his mother, Indira Gandhi, who was serving as the Prime Minister of India at the time, Rajiv Gandhi was propelled into the political spotlight. He became Prime Minister on 31st October 1984 during a time of national mourning. At just 40 years old, he made history by becoming the youngest individual to ever hold the office in independent India. His entry into politics was initially reluctant, but circumstances thrust him into a position of immense responsibility and expectation.

 He served until his loss in the 1989 election, at which point he became the Leader of the Opposition in the Lok Sabha. Six months before his own murder, he resigned in December 1990.

When Rajiv Gandhi initially assumed the position of Prime Minister of India in 1984, he was widely known as “.In the initial years of his political journey, Rajiv Gandhi earned the nickname “Mr. Clean” due to his untainted public image and his strong stance against corruption.  The widespread belief in his integrity, honesty, and commitment to eradicating the corruption that had become endemic in Indian politics by the conclusion of Indira Gandhi’s administration was a major contributing factor to this nickname.

In the early 1980s, American defence contracts with Pakistan caused India’s military to push for immediate improvements, such as a 155mm howitzer system to counter Pakistan’s recently purchased fleet of F-16 fighters. Under the direction of then Defence Secretary S.K. Bhatnagar, a Negotiating Committee was formed that, in November 1985, chose Swedish manufacturer AB Bofors and France’s Sofma as the top contenders for the ideal howitzer. Bofors was chosen in March 1986, even though Sofma’s product performed well in field trials.

The Bofors contract was the subject of discussions between India’s then-Prime Minister, Rajiv Gandhi, and his Swedish counterpart, Olof Palme, in 1985. Palme was determined to win the deal for Bofors, a firm that was in dire need of the transaction in order to avert significant layoffs that would have been politically damaging to his government, which was headed by the Swedish Social Democratic Party. In contrast, in accordance with the Government of India’s policy that no commissions or agency fees should be paid in relation to contracts acquired from India, Gandhi demanded the exclusion of intermediaries and agents as a requirement for the agreement. To finalise the agreement, Palme and Gandhi met in New Delhi in January 1986. In March, Palme’s efforts were successful when Bofors was awarded the $1.4 billion contract for 410 Bofors howitzers, the largest arms transaction in Swedish history. The decision-making process was unusually expedited in its final stages; it took only two days between Bhatnagar’s committee’s recommendation in favour of Bofors and Rajiv Gandhi’s signing. The scandal first surfaced in a 1987 broadcast by the Swedish radio program “Dagens Eko.” It claimed that Bofors paid “top Indian politicians” bribes in order to secure the howitzer agreement, according to the evidence of former Bofors employee Ingvar Bratt, who became a whistleblower.After the scandal broke, the governments of India and Sweden, along with Bofors, quietly worked to downplay the issue. Key investigations were delayed or blocked for years, raising suspicion that efforts were made to keep the truth hidden.

Some well-known people were named in the main claims

1) Ottavio Quattrocchi, an Italian businessman, was believed to be a key middleman in the Bofors scandal due to his political connections. His intimate relationship with the Gandhi family contributed to political disputes. Quattrocchi managed to avoid Indian law for several years despite several attempts to extradite him.

2) Chadha, a prominent arms dealer, was another central figure in the Bofors scandal, accused of facilitating illegal commissions.A crucial component of the inquiry was Chadha’s role in assisting the bribe payments.

3)Then-Prime Minister Rajiv Gandhi was accused of having knowledge of the kickbacks in the Bofors deal. The scandal negatively impacted his political career in the long run, even though there was no concrete proof linking him to it.

4)Hinduja Brothers: The Hinduja Group, a global conglomerate, was also dragged into the controversy. Despite their consistent denials, the brothers were charged with taking kickbacks.

The scam’s legal processes

1. Following the National Audit Bureau of Sweden’s report and a subsequent report in ‘The Hindu’ newspaper on firms involved in the gun trading business in India and the associated bank accounts. The Comptroller and Auditor General of India took over this case for further investigation. The Comptroller and Auditor General of India published the report in 1989, highlighting the significant wrongdoing surrounding the transaction, including its financial aspects. Each weapon has its own restrictions and requirements in the form of General Staff Qualification Requirements, which adhere to laws governing the use of firearms, but these restrictions were not included in this agreement in order to render the transaction flawed.

2. The Bofors scandal damaged Rajiv Gandhi’s image and contributed to his defeat by V. P. Singh in the 1989 general election.. The CBI had taken on the case as a result of Mr. V. P. Singh’s FIR. The CBI had filed charges of cheating, forgery, criminal conspiracy, abuse of power, and other offenses against a number of people and businesses, including Mr. Win Chadha, the main agent of Bofors in India, Mr. Martin Adbo, the former president of the firm, Mr. Hinduja, the owner of Pitco/Moresco/Moineas SA, and Mr. Ottavio Quattrocchi, an Italian businessman, for accepting bribes and engaging in corruption.

3. The Swiss bank would need to provide the data about the accounts where the Bofors had been paying for the middleman involved in the deal, and the criminal procedures would also need the closure of those specific accounts. The government agreed to India’s demands and froze the five bank accounts as a result of the compelling evidence and outrageous agreement.

Timeline of Legal Procedures

The Bofors controversy’s legal processes lasted over twenty years and came to represent systemic flaws in India’s legal system. The most important developments are:

1993: The CBI submitted its initial chargesheet, which included the names of Ottavio Quattrocchi, Win Chadha (who was said to be a middleman), and other individuals. Financial irregularities and kickbacks were the basis for the accusations.

2004: On the grounds of insufficient evidence, the Delhi High Court overturned the charges against Rajiv Gandhi after his death. This ruling highlighted the challenges the court system has in determining guilt in high-profile cases, particularly when the evidence is circumstantial.

2006: The CBI’s failure to prevent Quattrocchi from gaining access to frozen bank accounts in London was heavily criticised in 2006. In addition to exposing procedural flaws, this failure emphasised the need for better international cooperation mechanisms. Due to insufficient evidence, the prosecution of Quattrocchi was dismissed in 2007.

2007: The closure, which was contentious, raised concerns about the responsibility of law enforcement organisations and the impact of politics on the judicial system.

These proceedings highlighted wider issues, such as the difficulty of dealing with corruption instances that have international aspects, political meddling, and delays in the administration of justice.

The Case’s Major Elements

-(2004) CBI v. Ottavio Quattrocchi:

The case brought to light procedural flaws and the difficulties of bringing those with political ties to justice. The Delhi High Court’s ruling that the case against Quattrocchi be dismissed due to insufficient evidence cast doubt on the effectiveness of India’s legal system.

-The 2004 Rajiv Gandhi Exoneration:

The challenges in proving corruption cases, particularly when the evidence is circumstantial and dependent on global collaboration, were brought to light by the Delhi High Court’s ruling to acquit Rajiv Gandhi. Additionally, it emphasises the constraints of the legal system while handling politically sensitive and high-profile issues.

-Issues with Extradition:

The fact that Quattrocchi cannot be extradited from nations like Malaysia and Argentina demonstrates the flaws in India’s extradition procedures. In order to guarantee accountability in situations involving foreign aspects, it emphasizes the need for strong bilateral treaties and efficient diplomatic initiatives.

Conclusion

The Delhi High Court’s ruling to dismiss the charges against all the defendants in the Bofors fraud case in 2017 for insufficient evidence was opposed by BJP politician Ajay Kumar Agarwal. The existence of loopholes in the investigations that were conducted at the time was cited as the primary basis for contesting the order. This appeal was denied by a bench led by the then-Chief Justice Ranjan Gogoi, who pointed out the absurdity of the 13-year delay in bringing this appeal against the high court’s 2005 decision. The grounds for this appeal were illogical, and the delay of more than 4,500 days in submitting it was not justified.

Additionally, the CBI was held responsible in this instance for failing to act appropriately at the appropriate moment. They had dragged their feet in filing FIRs, failed to properly contest the appeals of the accused in court, and failed to deliver the necessary correspondence to the international courts on time, among other things. The question of whether the CBI was inefficient or if there was internal corruption is still up for discussion. The fact that the majority of the key data was in Swedish during the pre-internet era was a challenge because it wasn’t very useful because it provided very little concrete information. However, if those materials had been declassified and viewed from today’s perspective, they may have shed a different light on the situation. In this instance, the lack of evidence repeatedly favoured the powerful culprits.

Even when Congress regained power, its first act was to refute and reject the allegations of bribery and corruption made against Rajiv Gandhi and other individuals associated with the party. During the investigations of the Bofors fraud, investigators who had been dispatched to Switzerland had also found transactions and data pertaining to the 1981 submarine deal with the West German company Howaldtswerke-Deutsche Werft AG (HDW). According to the allegation made here, an Indian agent was paid $23 million to broker the transaction. According to the Indian Embassy in Bonn, this information was provided to them, which stated that HDW did not want to lower the price of the submarines due to the commission that had already been paid. Despite the fact that such information was later refuted.

 FAQs

Q1. What was the Bofors Scam all about?

The Bofors Scam was a major political corruption scandal in India during the 1980s, involving allegations that Indian politicians and defense officials accepted kickbacks from the Swedish arms manufacturer Bofors AB in a $1.4 billion deal to supply 155mm howitzer guns to the Indian Army.

Q2. When did the scandal come to light?

It broke out in April 1987 when Swedish Radio revealed that Bofors had paid bribes to Indian officials to secure the contract. This created an uproar in India and severely damaged the credibility of then Prime Minister Rajiv Gandhi.

Q3. Who were the main accused in the scam?

The major names included Ottavio Quattrocchi (an Italian businessman with links to the Gandhi family), top defense officials, and several Indian intermediaries. Rajiv Gandhi was accused politically but never convicted or legally implicated in court.

Q4. What impact did it have on Indian politics?

The Bofors scandal shattered the “Mr. Clean” image of Rajiv Gandhi, contributed to the Congress party’s defeat in the 1989 elections, and became a symbol of high-level corruption in India for decades to come.

Q5. Why is the Bofors scam still remembered?

Because it marked the beginning of media-led investigations in India, showcased how foreign deals could compromise national interests, and exposed the weaknesses of India’s legal and political system in punishing the powerful.

 

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