BOFORS SCANDAL PDF

Aiming to replace the old field guns and artillery in the hands of the Army, the Indian government in the mid s decided to go ahead with the induction of bigger calibre mm howitzers. A deal was signed on March 24, , between New Delhi and the Swedish metals and armaments major, which said AB Bofors would supply the Indian Army with mm howitzers. An option to license-produce more guns was also included in the deal. The first whiff about the scandal came on April 16, when a Swedish Radio broadcast claimed that AB Bofors had paid kickbacks to key Indian policy makers and top defence officials to secure the deal.

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On this showing the institute in question escapes obloquy, and the evil that disfigures it appears something foreign to it… A great and general corruption In November last year Bofors began paying remunerations to the Indian contacts who had helped the company, but the money was not directly sent to India.

Instead it was sent to secret bank accounts in Suisse Bank in Geneva Photo: India Today The Dagens Eko news broadcast, which was relayed by international news agencies, went on to specify that three payments totalling Mentioning that the code name for the transactions was "Lotus" and that these payments were "only part of the total remuneration to the Indian contacts", the broadcast quoted unnamed sources within Bofors AB as saying that the company would end up paying "commission The broad denials issued by the Indian government and the studied denials, which on scrutiny turned out to be non-denials, put out by Bofors AB carried no credibility, especially in India.

A week after the Dagens Eko broadcast, Dagens Nyheter published two reports alleging that the Hindujas had received a commission from the company. It is not clear why, after this promising start, the Swedish news media went low-key, if not virtually silent, on the payoffs in the Bofors-India howitzer deal. But whatever be the explanation, we in The Hindu knew that a window had opened for us.

From now on, it would have to be the Indian press in determined, dogged, and, where required, aggressive pursuit of the truth behind the secret payments into the Swiss bank accounts that Nilsson had originally reported. But for months it seemed we were in a frustrating race to get to the truth, with little to show for our exertions. When we cast about, in India and in Europe, for relevant information and background on the howitzer deal and the alleged payoffs, we knew that corruption, influence-peddling, and various forms of law-breaking were pervasive in the international arms trade.

The challenge was to break through the walls of secrecy that had been fortified all around following some embarrassing whistleblower leaks. We had a general idea that arms exports by Swedish companies violating the law or circumventing the prohibitions on weapons sales to belligerents, and corrupt deals involving bribes and kickbacks concealed as "commissions" to middlemen and foreign officials were becoming a hot topic in Sweden.

But in the pre-Internet era and given the fact that most of the relevant material was in Swedish, we had very little information on the specifics of these unsavoury business transactions. The document lists the various investigations, enquiries, reviews, and prosecutions launched in the cases. India Today cover from May Numerous investigations were initiated to examine the complex web of bribery and arms diversions but, despite an admission from a key industry executive only two individuals have been charged with violating Swedish law: a Nobel Kemi manager and a private arms trader".

India was not a proscribed country for Swedish arms sales. But it was clear that for political reasons the Social Democratic government of Ingvar Carlsson was intent on damage limitation and cover-up in the howitzer deal; and most opposition politicians, for their own reasons, closed ranks behind the government.

The official investigation into the alleged Bofors bribes to Indian officials was quickly called off. Subsequently, in December , he and some other former Bofors executives were found guilty of serious offences, including "gross smuggling", but got away lightly, escaping prison as well as fines.

When strenuous damage limitation and cover-up efforts were underway in India and Sweden, a tip came to us from unexpected quarters. We knew by then that the percentage-based kickbacks, disguised as commissions, that Bofors AB was contracted to pay for winning the India howitzer deal considerably exceeded this standard rate.

As the separate investigations by The Hindu and the Indian Express progressed, gathering pace but taking different directions, we realised two things. Competitive pressure, instead of putting us at risk of cutting corners, had the effect of focusing our investigative efforts, pushing us to verify and verify again every detail we learnt. It also helped us understand that competing newspapers and journalists could cooperate with, and reinforce and reassure, each other in certain areas of the investigation.

A quarter century after The Hindu got lucky in Stockholm, our confidential source, who had long retired by then, went on record to reveal that he was Sten Lindstrom, an experienced police officer with strong views on right and wrong.

As head of the investigation department of the Swedish National Bureau of Investigation NBI , he had personally investigated the Bofors-India payoffs and had had all the incriminating papers seized. He described this discovery as an "accident": We were conducting several search and seize operations in the premises of Bofors and their executives.

I have some experience in this area, so I asked my team to take everything they could find. In the pile were one set of documents to Swiss banks with instructions that the name of the recipient should be blocked out. An accountant doing his job asked why anonymity was necessary since the payments were legal.

Bofors was unable to explain and then we found more and more documents leading to India. Lindstrom was our principal and key source through the investigation. He explained that he had leaked the Bofors-India documents to The Hindu because, as a Swedish citizen "raised in the best traditions of social democracy", he had been morally outraged and shocked by "the scale of political involvement in Sweden breaking all rules including those we set for ourselves".

During our interaction on Bofors, he asked for nothing more than fair, accurate, and contextualized use of the material he was providing and I can confirm that no material benefits or rewards of any kind were asked for or given.

The investigation was hugely dependent on the photocopies of the documents he was passing on to us. However, our confidential source was not willing to part with everything he had in one go. He would leak the documents only in phased instalments over a period of eighteen months, so it was a process of negotiating with him for more and waiting patiently for the next lot.

But he was good enough to give us a general idea of what was to come in the next round. At one point, we sensed that the Indian government had surmised, perhaps even arrived at the conclusion through a process of elimination, that Lindstrom was the leaker. But we knew that the government could not go public with its suspicions for a simple reason: publicly naming the head of the investigation, the senior police officer who had ordered the incriminating documents to be seized, as the leaker would only add to its woes by authenticating the documents leaked in the eyes of the public.

We were deeply concerned when we heard that a complaint had been made about the leaks and an enquiry was being conducted by the Swedish authorities against our confidential source; and we were relieved when the enquiry apparently found no evidence of wrongdoing. But Lindstrom was not our only source. During our long-drawn-out investigation, we met and talked with the Hinduja brothers, two of whom had figured in the documents leaked to The Hindu.

We talked to Win Chadha, the original Bofors agent mentioned by Nilsson in the Dagens Eko broadcast; he had called me long distance to protest his innocence and to pressure us to call off the hunt. We searched the companies registry in the UK for information and clues relating to the shell companies and their directors.

We talked to various sources about the business dealings of Ottavio Quattrocchi, the "Q" of the Ardbo diary who had close relations with the Rajiv Gandhi family; it turned out that the Snamprogetti representative in India was the mover behind the Bofors payments to AE Services Limited. We interviewed Swedish Prime Minister Carlsson on what he knew about the Bofors payoffs and why his government was not doing more to get at the truth.

I must add that during this period a few other publications in Sweden and India, notably India Today, contributed some new information and insights that helped fill in some gaps and make better sense of a complex story.

The transaction was valued at SEK 8. The payoffs were in violation of the formal assurances sought and obtained from Bofors by the government of India.

The evidentiary basis for the investigation was the documentation leaked to The Hindu by the confidential source, the key documents being the Swiss bank papers, transaction documents, secret contracts, and a diary and notes kept by Ardbo, which had been seized by the Swedish police. What we learnt early on in our investigation was that the documents in hand or in the pipeline were vital to the story, but the story should not get lost in the web of complexity that surrounded the transactions. There were also false trails, leading to persons who were in no way involved in the scandal.

For example, a leading lawyer, going by unrelated events and misleading proximities, wrongly accused Amitabh Bachchan of involvement in Bofors and this was prominently reported in a section of the press.

But our investigation showed that this was completely baseless and we had no hesitation in making this clear. But above all, we learnt that making sense of the documents, fitting them in a larger frame that was slowly taking shape, was what the Bofors investigation was about.

No journalistic investigation would be complete and there would always be gaps to be filled that we could not fill. Let me digress here on the role of documents in investigation.

It is true that documents are often the best evidence and, for the informed public, they can be clinching proof of corruption or abuse of power or other wrongdoing. The massive troves of confidential, secret, and hidden documents released, over the past decade, by WikiLeaks, and the game-changing documented disclosures by Edward Snowden on global surveillance by the US National Security Agency underline this point.

Of course, it is best to have both. Now it could be understood in terms of five modes of action. The first was the decision-making on the choice of howitzer and the motive for the crime clearly lay here.

The second mode comprised the arrangements for the payoffs. The third was the cover-up and crisis management. What was the hard information we had on decisionmaking on the howitzer? The official and commercial documents in hand revealed that from the Government of India was looking out for a state-of-theart mm howitzer system to meet defence operational requirements that were said to be urgent.

The official record also showed that between October and February , the Indian Army carried out no fewer than seven evaluations of the relative merits of the howitzer systems offered by the shortlisted bidders.

General A. Vaidya was army chief for most of this period, from 31 July to 31 January In the first six evaluations, the Sofma mm TR howitzer, with its extended range, was decisively preferred to the Bofors gun.

Financial considerations also gave the French manufacturer what seemed to be an unbeatable lead. However, Prime Minister Rajiv Gandhi and a small group of ministers and officials who knew his thinking had made up their minds to award the contract to the Swedish arms manufacturer. Since they knew no way to make army headquarters under General Vaidya budge from its preference for the French gun, they patiently waited it out, notwithstanding the urgency of the strategic military requirements.

With army headquarters reversing in February a succession of professional judgements that had gone against Bofors, the stages of final decision-making were telescoped and rushed through, resulting in the formalisation of the choice of Bofors on March 24, Subsequently, the CBI charge sheet revealed that after the Negotiating Committee recommended, on March 12, that a Letter of Intent be issued to Bofors, the file was approved by five officials and three ministers on a single day, March 13, and was finally approved by Rajiv Gandhi on March The decision-making mode could now be related to the payments mode, that is, the contracted arrangements for secret payments into the Swiss bank accounts.

We could see that these two modes constituted a cohesive set, belonging to the past, and the government could do nothing about this. It can be seen from this that investigative journalism is not just about technique, documentation, and data analysis, although these are essential requirements for a complex investigation. They must be consciously understood to be a means to an end, a coherent, nuanced, compelling story that would make sense to an informed public, raise awareness of the main issues, perhaps serve as a catalyst for progressive change or reform, and fully justify the time, effort, and resources invested in the investigation.

The answer must necessarily be complex, nuanced, and inconclusive. Investigative journalism played the lead role in bringing the truth to light but it would be a mistake to think that the impact was the contribution of journalism alone. It was the political opposition spearheaded by VP Singh that took the work of journalism far and wide, deep into society and the polity, and developed it into a major election campaign theme.

Let me digress a little here on investigative journalism and the question of impact. Every journalist working determinedly to unearth the truth desires impact. The success of investigative journalism is often judged by whether it is able to generate change in the desired direction. But there are obvious problems with applying this criterion. For one thing, it exaggerates the role the news media play, assigning to them a power to shape the larger external environment that they clearly do not have.

Secondly, the impact of journalism on complex socio-economic and political realities is extremely hard to measure. Even in the case of the most celebrated journalistic investigation of the last fifty years, Watergate, the jury is still out on whether it made any real difference to politics in the United States and it would be an exaggeration to say that "it brought down a President".

The cover-up strategy adopted by the Indian and Swedish governments between and meant that the investigators faced an uphill task after a criminal case was registered by the CBI in January , nearly three years after Dagens Eko broadcast the allegations.

Evidence that could have been collected from Bofors AB and the Swedish investigators had a case been registered by an independent-minded CBI in April , or at least after The Hindu published the first set of documents in April , was irremediably lost.

Moreover, the cover-up and damage limitation efforts were resumed when the Congress, headed by PV Narasimha Rao, formed a minority government in , and once again after a rejuvenated Congress returned to power at the head of a new coalition, the United Progressive Alliance, in As the Bofors corruption case slowly made its way through the courts and the administrative-bureaucratic processes in India and Switzerland, the main accused, Rajiv Gandhi, was assassinated on 21 May , halfway through the 10th Lok Sabha election.

A decade later, two other key accused, SK Bhatnagar, who had been defence secretary at the time of the conclusion of the Bofors howitzer deal, and Win Chadha, the Bofors agent, were dead. In July , the Swiss federal court ruled that India was entitled to receive Swiss bank documents relevant to the case.

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What is the Bofors scam case?

But it soon came back to haunt the country, particularly, the then ruling Indian National Congress. On 24 March , a multi-million dollar contract between the Government of India and Swedish arms company Bofors was signed for supply of mm Howitzer field guns. It was then the biggest arms deal ever in Sweden. Swedish Radio had alleged that kickbacks were paid to people, including top politicians in India to finalise and formalise the deal.

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Bofors Scandal

In , the Indian government lifted its blacklist on Bofors. The lifting of the ban came during the Kargil War , when the Bofors guns proved to be efficient but were crippled by a shortage of spare parts. Bhatnagar and a number of others. Bhatnagar died. However, this was reversed by Supreme Court of India on 7 July

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