39997921 Bofors Scandal

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Bofors scandal

The Bofors scandal was a major corruption scandal in India in the 1980s; the then Prime Minister

Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for

winning a bid to supply India's 155 mm field howitzer. The scale of the corruption was far worse

than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian

National Congress party in the November 1989 general elections. It has been speculated that the

scale of the scandal was to the tune of Rs. 400 million. [1] The case came to light during

Vishwanath Pratap Singh's tenure as defence minister, and was revealed through investigative

journalism by Chitra Subramaniam and N. Ram of the newspapers theIndian Express and The

Hindu.[2]

Ottavio Quattrocchi was accused as the middleman in the scandal because of his intimacy with

Rajiv and his Italian-born wife Sonia Gandhi. Magazine cover fromIndia Today

The name of the middleman associated with the scandal was Ottavio Quattrocchi, an Italian

businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was reportedly

close to the family of Prime Minister Rajiv Gandhi and emerged as a powerful broker in the

1980s between big businesses and the Indian government. Even while the case was being

investigated, Rajiv Gandhi was assassinated on May 21, 1991 for an unrelated cause. In 1997,

the Swiss banks released some 500 documents after years of legal and the Central Bureau of

Investigation (CBI) filed a case against Quattrocchi, Win Chadha, also naming Rajiv Gandhi, the

defence secretary S. K. Bhatnagar and a number of others. [3] In the meantime, Win Chadha also

died.[4]


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Meanwhile February 5, 2004 the Delhi High Court quashed the charges of bribery against Rajiv

Gandhi and others,[5] but the case is still being tried on charges of cheating, causing wrongful

loss to the Government, etc. On May 31, 2005, the High court of Delhi dismissed the Bofors case

allegations against the British business brothers, Shrichand, Gopichand and Prakash Hinduja.[6]

In December 2005, the Mr B. Datta, the additional solicitor general of India, acting on behalf of

the Indian Government and the CBI, requested the British Government that two British bank

accounts of Ottavio Quattrocchi be de-frozen 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 in 2003 by a high court order by request of the Indian government (when the

(now) opposition Bharatiya Janata Party (BJP) was in power). On January 16, 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 January 23, 2006 admitted that roughly Rs 21 crore, about USD $4.6

million, in the two accounts have already been withdrawn. The British Government released the

funds based on a request by the Indian Government.[7]

However, on January 16, 2006, CBI claimed in an affidavit filed before the Supreme court that

they were still pursuing extradition orders for Ottavio Quattrocchi. The Interpol, at the request of

the CBI, has a long standing red corner notice to arrest Quattrocchi.[8] Quattrocchi was detained

in Argentina on 6 February 2007, but the news of his detention was released by the CBI only on

23 February. Quattrocchi has been released by Argentinian police. However, his passport hasbeen impounded and he is not allowed to leave the country.[9]

However, as there was no extradition treaty between India and Argentina, this 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 Quattrochi's

arrest. In the aftermath, the government did not appeal this decision owing delays in securing an

official English translation of the court's decision.[10]

The Italian businessman no longer figures in the CBI's list of wanted persons and the 12-yearInterpol red corner notice against the lone surviving suspect in the Bofors payoff case has been

withdrawn from the agencys website after the CBIs appeal.[11]


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contradictions

1 June, 2005: A protracted legal wrangle that went on and on for eighteen long years has ended

up as a cipher, as the Delhi High Court acquitted three Hinduja Brothers in the sensational

Bofors case.

The case relates to the alleged kickbacks in a 1986 arms deal in which the Indian Army procured

155-mm Howitzers from Swedish firm A B Bofors. The deal was worth 1437.72 crore that time.

The kickbacks were sighted to be to the tune of Rs 64 crore, but the probe cost Rs 250 crore, in a

time span of 18 years.

The HC ruled that the prosecution has failed to prove that the Hinduja Brothers Gopichand,

Prakashchand and Srichand were linked to the kickbacks in the Bofors deal, which led to theouster of late Indian Prime Minister Rajiv Gandhi from power. The court later gave Rajiv a clean

chit. Three of the accused - former arms dealer Win Chaddha, ex-Defence Secretary S K

Bhatnagar and former Bofors honcho Martin Arbdo - died during the course of the probe.

The court held that the countrys premier investigation agency the Central Bureau of

Investigation came a cropper in producing the relevant documents and hence the case can't stand

on its legs.

No case can be proceeded against the Hindujas or the Bofors company in the absence of

original documents. I quash the framing of charges by the Chief Metropolitan Magistrate against

the Hinduja brothers and the A B Bofors company, Justice said while delivering a 22-page

judgment.

Based on this dubious material, to allow prosecution for many more years, in respect of a

transaction of more than 20 years vintage, is sheer persecution, waste of public time and money.

With this, the lone remaining accused in the case is Italian business tycoon Ottavio Quattrocchi.The CBIs umpteen efforts to extradite Quattrocchi have failed so far.

We will legally examine the judgment and decide on the further course of action, a CBI

spokesman said.


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Nov 07, 1999: trial court issues warrant against quattrocchi while summoning other four

accused.

Dec 13, 1999: CBI team goes to Malaysia to seek extradition of Quattrocchi but fails in its

efforts.

Mar 18, 2000: Chadha comes from UAE to face trial.

Jul 29, 2000: Special CBI court issues "open non-bailable arrest warrants" against Ardbo.

October 9, 2000: CBI files supplementary chargesheet naming Hinduja brothers as accused in the

Bofors gun deal.

December 20, 2000: Quattrocchi arrested in Malaysia, gets bail but is asked to stay within thecountry.

August 6, 2001: Former defence secretary Bhatnagar dies of cancer.

October 24, 2001: Win Chadha dies of heart attack at his New Delhi residence.

November 15, 2002: Hinduja brothers formally charged with cheating, criminal conspiracy and

corruption.

December 2, 2002: Malaysian court denies permission for Quattrocchi's extradition.

July 28, 2003: Britain freezes Quattrocchi's bank accounts.

January 4, 2004: Swiss authorities agree to consider CBI's request for providing Quattrocchi's

bank details.

February 4, 2004: Delhi High Court clears Rajiv Gandhi of involvement in the Bofors kickbacksscandal.

May 31, 2005: Delhi High Court clears Hindujas of involvement in the scandal.


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Key players in Bofors scandal

Headlines TodayNew Delhi, April 28, 2009

The CBI on Tuesday gave a clean chit to Italian businessman Ottavio Quattrocchi in the Rs

64 crore Bofors payoff scam. Here are the key players in the Bofors scandal.

Rajiv Gandhi: The then prime minister of India, he was accused of receiving kickbacks

from Bofors AB. He was posthumously cleared from this allegation in 2004.

S.K. Bhatnagar: Former defence secretary, he was accused of abusing his official

authority.

Ottavio Quattrocchi: The alleged middle man. Quattrocchi is the lone surviving suspect

in the multi-crore Bofors scandal. Until now, he was being sought in India for criminal

charges for acting as a conduit for bribes in the scandal.

Win Chadha: Arms agent. He was accused of receiving a part of the Rs 640 million

kickback in March 1986 by the Rajiv Gandhi government.

Martin Ardbo: Former Bofors chief, Ardbo was chargesheeted, as was the company.

The Hindujas: Proprietors of the UK-based industrial group, the Hinduja brothers were

also investigated for their role in the Bofors scandal. But the prosecution failed to prove that

Gopichand, Prakashchand and Srichand Hinduja were linked to the kickbacks.

Bofors' ghosts

In 1987, when the Bofors scandal broke, I was 30 and on the verge of making the transition from

Bombay editor to national journalist. For anyone in my position, 1987 was a terrific year. It was

the year that Rajiv Gandhi's Camelot collapsed; when Giani Zail Singh tried to overthrow the

legally elected government of India; when the Ambani-Wadia rivalry was at its height; when

both Arun Singh and Amitabh Bachchan resigned; when V P Singh turned against Rajiv and TheIndian Express rehired Arun Shourie and went for the government with a vengeance.

It was also the year of Bofors.

While Bofors remained, till the end, Chitra Subramaniam's story (without Chitra there would

have been no Bofors; the story would have died down after two weeks), all of us did our bit to


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try and find out what was really going down. For my part, I stuck to playing the analyst, though I

did my share of glamorous reporting (travelling to Guildford, Surrey, to find the offices of AE

Services, one of the Bofors agents -- only to discover that no such office existed, despite the joint

parliamentary committee's claims). Merely analysing documents might sound dull, but Bofors

was an affair of such complexity that for five years (1987 to 1992), I was completely hooked. I

became, what you could call, a Bofors junkie.

All this came back to me last month as both the Congress and the Bharatiya Janata Party tried to

raise the ghost of Bofors. The Italians took the money, screamed the BJP. Aha! Retorted the

Congress, you people said that the gun was no good! Well, look how well it has performed in

Kargil.

Both sides were, of course, telling lies. But Bofors is so complicated an issue -- it was said in

1989 that only four people in India understood it -- that anybody can get away with saying pretty

much what he or she wants.

But in case you are interested in the truth, here is a brief guide to Bofors.

If you've read this far, then you care enough to know the broad outlines of the scandal. In 1986,

the Indian army signed a contract to purchase the Bofors Howitzer. Nobody noticed till 1987

when Swedish radio claimed Bofors had paid bribes to secure the contract. Swedish radio's

concern was not with India, but with Sweden where the Bofors company had been at the centre

of a series of scandals. But predictably, Indian political parties seized the issue and demanded an

explanation from the government.

An experienced prime minister would have said, "We will investigate the matter." But Rajiv

Gandhi rushed to announce that not only had bribes not been paid but that no commissions had

been given because the deal had no agents. This was a silly thing to do because all his critics now

had to do was to prove that commissions (not, in themselves, illegal) had been handed out. And

sure enough, it turned out that contrary to what it claimed, Bofors hadpaid commissions.

Thanks to Chitra Subramaniam, we have some idea of who got the commissions. One set of

payments went to a company called Pitco, believed to be controlled by the Hindujas. Another set

went to a Panamanian company called Svenska, whose Swiss account was controlled by Win

Chadha, a well-known Delhi arms dealer. A third set went to a mysterious company called AE

Services, which had never been heard of before and hasn't been heard of since.


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For Bofors buffs, the first two sets of payments seemed predictable. The Hindujas have contacts

in every party and, as businessmen, they have every right to take commissions. (Nevertheless,

they have been needlessly sanctimonious in denying any involvement.) Likewise with Chadha.

He was the Bofors agent in India. Naturally, he would get paid in a Swiss bank account.

Our interest centred on two areas. One: who was behind AE Services and why was it paid a

commission? And two: did any of these agents pass a part of their remuneration on to a public

official, a bureaucrat, a general, a minister, or even the prime minister?

Neither question has proved easy to answer. When I tracked down AE Services, I discovered that

it had no offices, only one employee (a Major Bob Wilson), and a paid up capital of 100. After

it received the Bofors payment, it ceased to exist. So, the AE Services link was extremely

suspicious. Why would Bofors hire such a company?

There were two theories. The first was that the AE services account represented the political

payoff; that the money was meant for the Congress. The second was that the company was a

front for a fixer or a wheeler-dealer who helped swing the deal.

Most of us concentrated on the first theory. If the Congress had set up a front company in 1985

to receive kickbacks, who in the party would have run it? The obvious suspect was Arun Nehru.

The Hindujas even suggested to me -- off the record, but this was in 1988, so I'm sure they won't

mind my revealing this 11 years later -- that AE Services had been set up by Swraj Paul for Arun

Nehru. (This is why it was an English company.) I investigated this angle but found no evidence

of Swraj Paul's involvement.

Then, Chitra Subramaniam gold hold of the diary of Martin Ardbo, the Bofors boss who signed

the deal. The diary revealed that after the scandal broke, Ardbo was in regular touch with the

Hindujas who were acting as trouble shooters. The Hindujas, he noted, told him that their

enemies included (Nirmal) "Sethia" and "Serge Paul". So, perhaps that was why they were so

keen to implicate Paul in this scandal.

But Arun Nehru's involvement started out from page after page in Ardbo's diary. There was a

reference to "Nero" and many references to the consequences of the revelations on "N". But,

Ardbo noted, he didn't really care what happened to N.

He was more concerned about the consequences for "Q". Though there was nothing in the diary

to suggest who Q was, many of us thought it was a reference to Ottavio Quattrochi, the high


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flying representative of Snamprogetti, an Italian public sector company, in New Delhi. These

suspicions were strengthened when Chitra Subramaniam traced some of the AE Services money

to an account controlled by him. Moreover, Quattrochi also filed an appeal to stop the Swiss

from revealing the details of his account to the Central Bureau of Investigation and skipped India

one step ahead of the investigators.

So, had we been wrong to follow the first Congress payoff theory and to consider Arun Nehru a

suspect? Should we have followed a second approach and treated AE Services as a front for a

well connected wheeler-dealer -- assuming that Quattrochi was that wheeler-dealer?

The jury is still out on that one.

But the other key questions remain. If the agents passed the money on as bribes, then who got the

pay-offs? And what were they paid for?

The simplest way of looking at the deal is this: Rajiv Gandhi took the bribe and decided to buy

the Bofors gun. But there is a problem. Bofors was the choice of army headquarters and more

specifically, of General K Sundarji. Between the time the army HQ sent its recommendation in

favour of Bofors to the time that the government announced Bofors had got the contract, there

were just 24 hours. So, if the choice of Bofors was dictated by financial considerations, then

regardless of whether the politicians took the money or not, the army had to also have been

involved.

A fortnight ago, General Mayadas (retd), an early critic of the Bofors gun, told the press that

Bofors was Sundarji's baby. Other critics of Bofors have claimed -- perhaps unfairly -- that army

AQ misrepresented Bofors' superiority over Sofma (the other candidate) because the army brass

wanted the gun.

We will never know what the truth is -- Rajiv and Sundarji are dead, and the general's mentor,

Arun Singh (like Arun Nehru, a part of the ruling establishment) is keeping his mouth shut.

Certainly, there is nothing in Sundarji's record to suggest a whiff of financial impropriety. On the

other hand, most investigators believed the money paid to Svenska couldn't have been meant for

Win Chadha alone -- he wasn't important enough to merit such a large sum (especially if the

Hindujas, Arun Nehru or Quattrochi were involved). The suspicion is that Svenska served as a

slush fund from which generals and civil servants were paid off, at Chadha's level.


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What is clear, amidst all the murkiness, is that neither the BJP nor the Congress is telling the full

story. For the Congress to say, "Look, the gun has performed so well in Kargil" is to miss the

point. Of course, Bofors is a good gun -- at that level, they all are -- but that does not mean the

deal was clean. Equally, for the BJP to act as though the Gandhi family's involvement is a matter

of record, is to overstate the case.

So far there is not a shred of evidence to link Rajiv Gandhi to the financial improprieties in the

deal. Yes, he was defence minister when the deal was signed, but the ministry was being run

from the prime minister's office by Arun Singh, who later became minister of state for defence,

and who was Sundarji's guru. Though Arun Singh is a part of this government, nobody is asking

him questions. Likewise, there are legitimate questions to be asked of Arun Nehru. But instead of

asking him anything, the BJP has given him a ticket.

It is now 12 years since I started following Bofors. Everything about the deal now seems

curiously dated. Even the money involved -- Rs 640 million -- is peanuts by today's standards.

Worse still, I've come to the conclusion that no political party has any interest in the truth. Why

bother to find out what really happened when you can score political points by misrepresenting

the facts? Consequently, all that will remain are the many questions. I doubt if we will ever get

the answers.

Vir Sanghvi

Chronology of the Bofors scandalPublished: Tuesday, Feb 27, 2007

NEW DELHI: The Bofors gun deal, signed between the Indian government and the now defunctSwedish arms company AB Bofors 21 years ago, has once again come to haunt the governmentand politics of this country.

Ottavio Quattrocchi, the Italian businessman accused of being a conduit in the bribes that were

alleged to have been paid to facilitate the deal, was detained in Argentina and then subsequentlyreleased on bail, much to the embarrassment of Indian investigators who have been on his trail.

Following is the chronology of events in the Bofors howitzer payoff scandal:

March 24, 1986: A $1.4 billion contract between the Indian government and Swedish armscompany AB Bofors signed for supply of over 400 155mm howitzers.


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February 12, 1997: Letters rogatory issued to Malaysia and United Arab Emirates (UAE)seeking arrest of Quattrocchi and Win Chadha.

May 1998: Delhi High Court rejects Quattrocchi's plea for quashing of the 'red corner' noticeissued by Interpol at the request of CBI.

October 22, 1999: CBI files first chargesheet naming Win Chadha, Quattrocchi, former Indiandefence secretary S.K. Bhatnagar, former Bofors chief Martin Ardbo and Bofors company.Former prime minister Rajiv Gandhi's name figured as "an accused not sent for trial" as he waskilled in 1991.

November 7, 1999: Trial court issues arrest warrants against Quattrocchi, while summoningother four accused.

December 13, 1999: CBI team goes to Malaysia to seek extradition of Quattrocchi; fails in itsefforts.

Early 2000: Quattrocchi approaches the Supreme Court for quashing of arrest warrant againsthim. Court asks him to appear before CBI for interrogation while protecting him from beingarrested. Quattrocchi refuses to accept the order, saying his counsel misled the court.

March 18, 2000: Chadha comes to India to face trial.

July 29, 2000: Trial court issues "open non-bailable arrest warrants" against Ardbo.

September 4, 2000: Chadha moves Supreme Court for permission to go to Dubai for treatment.Supreme Court rejects plea a week later.

September 29, 2000: Hindujas issue statement in London saying funds received by them fromBofors had no connection with the gun deal.

October 9, 2000: CBI files supplementary chargesheet naming Hinduja brothers as accused inthe Bofors gun deal.

December 20, 2000: Quattrocchi arrested in Malaysia, gets bail but is asked to stay within thecountry.

August 6, 2001: Former defence secretary Bhatnagar dies of cancer.

October 24, 2001: Win Chadha dies of heart attack at his New Delhi residence.

November 15, 2002: Hinduja brothers formally charged with cheating, criminal conspiracy andcorruption.

December 2, 2002: Malaysian court denies India's request for Quattrocchi's extradition.


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July 28, 2003: Acting on India's request, Britain freezes Quattrocchi's bank accounts.

January 4, 2004: Swiss authorities agree to consider CBI's request for providing Quattrocchi'sbank details.

February 4, 2004: Delhi High Court clears Rajiv Gandhi of involvement in the Boforskickbacks scandal.

May 31, 2005: Delhi High Court clears Hindujas of involvement in the scandal.

Dec 31, 2005: The CBI tells Crown Prosecution Service (CPS), London, that it has not been ableto link the money in two accounts of Quattrocchi with the Bofors kickbacks

Jan 7, 2006: Two accounts of Quattrocchi in London banks containing 3 million euros and $1million were defreezed after then additional solicitor general B. Dutta met the CPS lawyers.

Feb 6, 2007: Quattrocchi detained at Iguazu international airport on an Interpol lookout notice.

Feb 13, 2007: CBI writes to Ministry of External Affairs for Argentinean Extradition Act andtells Interpol Buenos Aires that documentation being prepared for extradition proceedings.

Feb 24, 2007: Fresh warrant of arrest against Quattrocchi obtained from Delhi court

Feb 26, 2007: Quattrochhi released on bail with condition that he does not leave Argentina.

Feb 28, 2007: Two-member CBI team to leave for Argentina.

Win Chadha's death, a setback to Bofors case

By J. Venkatesan

NEW DELHI, OCT. 24. The death of the 77-year-old Dubai-based businessman, Mr. Win

Chadha, key accused in the `Rs. 64 crore Bofors payoff case', early this morning is considered a

setback to the trial as charges are yet to be framed in the case.

As the CBI has already split the case, only the three Hinduja brothers - Mr. Srichand, Mr.

Gopichand and Mr. Prakashchand - figure in the main case. A few months ago the former

Defence Secretary, Bhatnagar, another accused in the case, died.

A separate case has been filed against the Italian businessman, Mr. Ottavio Quattrocchi, and the

former president of AB Bofors, Mr. Martin Ardbo, as the CBI has not been able to secure them


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to face the trial. While Mr. Quattrocchi is facing extradition proceedings in Malaysia, indications

are that Mr. Ardbo will not be extradited from Sweden.

Even as CBI sources maintained that Mr. Chadha's death will not affect the trial, legal experts

feel that the death of most of the accused will be a setback to the progress of the trial and alsoweaken the thrust of the case, which relates to conspiracy and payment of commission in the gun

deal.

As none of the accused who figure in the initial chargesheet is facing trial, proceeding further

with the case will be futile, they say. The names of the Hinduja brothers, who were added only

later, figure in the list of accused now.

Some others feel that after the death of two of the key accused, the CBI can now concentrate on

the Hindujas and expedite the trial with the truncated chargesheet. It remains to be seen how theCBI and the court will proceed with the 12-year- old case.

Rajiv Gandhi cleared over bribery

An Indian court hascleared ex-prime ministerRajiv Gandhi of anywrongdoing in a high-

profile arms deal case.

But Delhi's High Court ruledthat the three billionaireHinduja brothers should betried for conspiracy to cheatthe government, a chargethey deny.

Prosecutors say Swedish firm AB Bofors paid them illegally inthe $1.3bn sale of 400 howitzers to India in 1986.

The Bofors scandal was a key issue in Gandhi's 1989 electiondefeat. He was assassinated while campaigning in 1991.

High Court judge JD Kapoorsaid there was no evidence ofinvolvement in the deal byGandhi or the late formerdefence secretary SK

Rajiv Gandhi was assassinated whilecampaigning in 1991

After 17 years of abuse andvilification, it's a special

moment today for me and mychildren, Rahul andPriyanka

Sonia Gandhi


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Bhatnagar.

"Sixteen long years of investigation by the [Central Bureau ofInvestigation] could not unearth evidence against them foraccepting bribes", he said.

Gandhi's widow, Sonia, who is now the leader of the mainopposition Congress party, was delighted with the verdict.

"My husband always said that one day his innocence wouldbe proved. I hope the people who caused him so much painwill now rethink the falsehoods they spread about him."

Trial date set

Britons Srichand and Gopichand Hinduja and Swiss citizenPrakash Hinduja deny any wrongdoing.

The brothers head a global business empire in a number ofsectors including banking, transportation andpharmaceuticals.

The judge cleared the Hindujas of conspiring with Gandhi andother public servants to cheat the Indian Government.

But they will face trial for entering into a criminal conspiracyto cheat the government.

Prosecutors say they receivedmillions of dollars in

commission from Bofors, nowknown as Kartongen KemiOch Forvaltning AB, for thedeal.

Commissions on defence dealsare illegal in India.

Ram Jethmalani, who hasdefended the Hindujas, has said the money paid by Boforswas part of a long-time consultancy agreement.

He told the Times of India the brothers "played no partwhatsoever in the securing of the gun contract by Bofors".

The brothers had challenged a lower court's trial order in2002 on the grounds that there was no material record toprove their involvement.

The judge said a magistrate was empowered to hear thecheating and conspiracy charges and set a trial date of 23

The Hindujas were cleared of conspiringwith the government


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February.

The BBC's Ayanjit Sen in Delhi says the Bofors case hasdogged India's political scene for over a decade and a half.

Indian prosecutors have over the years also charged Bofors

agent WN Chadha, the Italian businessman OttavioQuattrocchi and former Bofors chief Martin Ardbo.

Chadha has since died, while prosecutors have failed toobtain the presence in court of Mr Ardbo or Mr Quattrocchi.

THE BOFORS CASE

The end of the case

V. VENKATESANin New Delhi

The Bofors saga may at last be over with the Delhi High Court's verdict quashing the

charges of criminal conspiracy and cheating against theHinduja Brothers and the Bofors

company.

The three Hinduja brothers at the Tis Hazari courts in New Delhi in January 2001 afterthey appeared before a designated CBI court in the Bofors case.

THE Bofors case has had the distinction of serving for well over a decade as a symbol of and amataphor for political corruption at the top. It helped to mobilise public opinion againstcorruption in a way previous scandals had failed to do, and this, to a great extent, wasinstrumental in bringing down the Rajiv Gandhi government in the 1989 general elections, as


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there was a perception that he had presided over a massive cover-up operation to conceal thepay-off and its beneficiaries.

Since then, the investigation and trial of the case has taken several twists and turns, depending onthe character of the political dispensation at the Centre and the vagaries of the judicial system.

But no one would have imagined that the case would collapse irreversibly for want of effort bythe prosecution, the premier investigative agency, the Central Bureau of Investigation (CBI), tocorrect some minor defects in documenting the case. The Delhi High Court's May 31 judgmentputting the case to rest is inexplicable.

The origin of the case can be traced to a contract entered into between the Government of Indiaand A.B. Bofors in Sweden on March 24, 1986, for the supply of 410 field howitzers,ammunition and other accessories as part of the 155 mm gun system at a total cost ofRs.1,437.72 crores, On May 2, 1986, advance payment equivalent to 20 per cent of the contractvalue was made to the Bofors company by the government. This amounted to more than $50million, the foreign exchange equivalent of some Rs.64 crores at early-1986, pre-devaluation

rates. On April 16, 1987, the Swedish radio broadcast a story that Bofors had managed to obtainthe contract from the Indian government after the payment of large sums as bribes.

The payment obligations were contained in secret contracts protecting the illegitimate`entitlements', which were invariably expressed in percentage terms - totalling 9.2 per cent of thecontract value. The internal Bofors documents, seized by the Swedish police, obtained by Indian journalistic investigation in 1988-89 and fully authenticated in the CBI investigation, made itabsolutely clear that the payoffs made by Bofors were directly contingent on winning thecontract. The payoffs were in direct and flagrant violation of assurances repeatedly given byBofors to the Indian government to the effect that it had no agents or representatives in India forthe howitzer deal.

The CBI submitted its charge-sheet in the case on October 22, 1999, naming as accused formerDefence Secretary S.K. Bhatnagar, former Bofors agent W.N. "Win" Chadha, Italian businessman Ottavio Quattrochhi, President of Bofors company at the time of signing thecontract Martin Ardbo, and A.B. Bofors, Sweden, the private company.

In pursuance of the Letters Rogatory (a request application to a foreign court seeking informationor evidence from persons within the jurisdiction of that court) issued by the Special Judge, theSwiss government handed over a set of documents comprising 71 pages to the CBI on December18, 1999. On October 9, 2000, the CBI submitted a supplementary charge-sheet naming G.P.Hinduja, Prakash Hinduja and Srichand Hinduja, known as the "Hinduja Brothers", and RajivGandhi as accused.

Rajiv Gandhi's name was included as he, along with Bhatnagar, was allegedly complicit in theabuse of power and position in the grant of pecuniary favours to a number of Bofors middlemen.It was essential to preserving the integrity of the case, even though he could not have beenprosecuted, as he was dead at the time of filing of the charge-sheet.


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SHANKER CHAKRAVARTY

Per Ove Morberg (left), president ofA.B. Bofors, and Lars Gothlin, chiefjurist of Nobel

Industries, enter Parliament House Annexe for deposing before the Joint Parliamentary

Committee that probed the Bofors gun deal.

Of the remaining accused, only the Hinduja Brothers and Quattrochhi are now alive, apart from

the Bofors company, which is now known as Krtongen Kemi Och Forvaltning AB. The casesagainst the Hinduja brothers and Quattrochhi, therefore, are important as they were the allegedconduits for the bribe.

The supplementary charge-sheet revealed that Bofors transferred funds to the accounts openedby the Hindujas and that the Hindujas had opposed the handing over of documents by the Swissgovernment to the agencies of the Indian government.

In November 2002, Special Judge Prem Kumar found that Rajiv Gandhi's conduct after thewhistle was blown on the Bofors payoffs suggested that he was engaged in a "masssive cover-upoperation". Prem Kumar also dismissed the plea of the Hinduja brothers seeking discharge. He

held that the evidence offered strongprima facie grounds for proceeding with the prosecution ofthe Hindujas, under the Prevention of Corruption Act (PCA). The Hindujas appealed against thisjudgment in the Delhi High Court.

In February 2004, Justice J.D. Kapoor of the Delhi High Court offered them a partial relief ofdischarge under the PCA, but held them liable for prosecution on a number of other charges suchas cheating and conspiracy to cause wrongful loss to the government. He indicted the Boforscompany for forgery. The Hindujas, Quattrochhi and "Win" Chadha were to be held liable for"fraudulently and dishonestly representing that there were no agents involved in the negotiationsfor the contract" and further, for claiming that "the price quoted was the reduced price proportionate to the amount of commission they would have otherwise paid to the agents".

Justice Kapoor dismissed the charges against Rajiv Gandhi.

AGAINST this backdrop, the judgment delivered by Justice R.S. Sodhi of the Delhi High Courton May 31 quashing the proceedings against the accused for the remaining offences in the trialcourt has raised a political storm and shaken judicial conscience.

Observers are surprised that Justice Sodhi has cast aspersions on the nature of the investigationand the trial. In paragraph 3 of his judgment, Justice Sodhi wrote that the CBI, without waiting


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for the receipt of further documents from the Swiss authorities, filed a second charge-sheet onOctober 9, 2000, implicating the Hindujas. In Paragraph 66, he wrote: "Before parting, I mustexpress my disapproval at the investigation that went on for 14 years and I was given tounderstand that it cost the exchequer nearly Rs.250 crores. During the investigation, a huge bubble was created with the aid of the media which, however, when tested by court, burst

leaving behind a diastrous trail of suffering. The accused suffered emotionally. Careers - bothpolitical and professional - were ruined, besides causing huge economic loss. Many an accusedlived and died with a stigma. It is hoped that this elite Investigating Agency will be moreresponsible in future."

There is no mention of the source of the information regarding the cost of investigation ofRs.250 crores.

There were two sets of documents requested by the Indian government through the LettersRogatory relevant in the case of the Hindujas - one from Switzerland and the other from Sweden.

The documents transferred from Switzerland were entirely certified, and they provided proof ofpayment of commissions by Bofors from bank accounts in Sweden to coded bank accounts inSwitzerland. They were obtained through judicial process, with the Switzerland Supreme Courtclearing the transfer of documents, mainly bank papers, waiving their strict secrecy laws, as thedocuments were sufficient under the Swiss legal system to launch a prosecution for the offenceof bribery.

The documents from Sweden are relevant in throwing light on the contracts between Bofors andtheir agents. These were mainly procured by The Hindu's investigation between April 1988 andOctober 1989. It is the authenticity of these documents pertaining to the Hindujas that JusticeSodhi has called into question.

The issue before the court was whether Bofors made a representation to the Government of Indiathat there were no agents involved in the negotiations for the contract with the knowledge of theHindujas, and therefore, aprima facie case of conspiracy could be made against them.

Justice Kapoor, in his February 2004 judgment, held that as the Hindujas had been working asagents of Bofors since 1979, their contention that they were not aware of the representation ofBofors was unconvincing.

Justice Kapoor, in order to sustain this finding, relied on certain documents (contained inVolume 22 submitted by the Prosecution). In the trial court, it was discovered that thesedocuments were photocopies of some originals that no one had seen. The documents weresupplied to the CBI by the Editor ofThe Hindu, who did not disclose his sources. Justice Sodhisaid: "The Editor ofThe Hindu is not a person who can testify that the documents given by himare true copies of some original documents."

Justice Sodhi then referred to the statement made by the prosecution in the trial court - "that therelevant and material documents are not available in original and no copies duly authenticated inaccordance with the Indian Evidence Act are available".


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Justice Sodhi then concluded: "If these documents are not proved by satisfactory secondaryevidence and will not be ever proved at the trial, it will be a cruel joke on the accused to exposethem to a long and arduous trial and waste public time and money which will be totally out ofproportion to the results to be achieved. In fact, nothing will be achieved."

The CBI claimed that it managed to obtain some kind of authentication by the Ministry of Justicein Sweden for these documents. When The Hindupublished these documents in June 1988, theywere analysed and photographed and given to the Swedish Prosecutor with a request to confirmtheir authenticity. Lars Ringberg, then Chief District Prosecutor, told the CBI that he wouldcompare those documents with the original and let it know. Subsequently, he informed the CBIthrough Interpol that he had checked the documents and they were the same as the documents inthe Swedish files.

All this was done before the First Information Report was lodged in the case in 1990. Therelevant correspondence and documents were submitted to the court.

The CBI claimed that documents numbering 652 in Volume 22 were forwarded to India bySweden in response to India's Letter Rogatory in 1998. Justice Kapoor had directed the trialcourt to consider the admissibility of the documents at the appropriate stage, and the CBIsubmitted that the appropriate stage was only after the charge was framed and the evidence cameto be recorded. Justice Sodhi, however, refuted both these contentions.

The CBI relied upon a joint statement dated February 22, 2005, from Sten Lindstrom andThomas Lindstrand currently in the Prosecutor's office in Sweden, which read as follows:

"The photostat copies of the said original documents have been sent by the Prosecutor's Office tothe Ministry of Justice, Sweden, for their onward transmission to the Embassy of India,

Stockholm, for their onward transmission to [the] CBI in execution of Letters Rogatory have been duly initialled and stamped by him in token of authentication and that the originaldocuments were returned to the concerned parties in Sweden as per provision of Swedish Law."

But Justice Sodhi appears to have reached a different conclusion. He wrote: "It is thephotocopies provided by the Prosecutor's office that have reached India but the only change thathas taken place during the course of transmission is that an initial and seal of the Ministry ofJustice has been put thereon but no date. Under the Evidence Act, I cannot take judicial noticeeither of the seal or of the initial... . Moreover, what becomes crystal clear is that the Ministry ofJustice has not issued any certified copy of documents in their possession. There is no suchcertificate appended to photocopies nor is there anything to show that the authority which has putits seal and initials had the originals in its possession and made the photo copies therefrom."


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THE ENG KOON/AP

Italian businessman Ottavio Quattrocchi, one of the accused.

Based on this reasoning, Justice Sodhi pre-empted the trial by suggesting that the court, at thetime of framing charges, could decide whether the material collected during the investigationcould be converted into admissible evidence at the ensuing trial.

The CBI's reaction appeared strange. Having secured just two weeks from Justice Sodhi torectify the defects pointed out, the CBI returned to the court pleading helplessness. "If the CBI isincapable of producing relevant material, the case has no legs to stand," Justice Sodhi held.

Justice Sodhi then referred to two documents in Volume 22, which linked payments with theBofors gun contract, and created doubts about their veracity, as some words were in thehandwriting of somebody. "Unless the person who wrote those words is identified and it isproved that his position is such that his writing those words proves the truth of the contents, thedocuments are utterly useless. Based on this dubious material, to allow a prosecution to go on formany more years, in respect of a transaction of more than 20 years vintage, is sheer persecution,waste of public time and money. I cannot forsee any chance of the successful termination of sucha useless prosecution. It was for this reason, I thought of giving the CBI an opportunity to bringthe case back on rails. As already noted, the CBI has spurned the offer," Justice Sodhi noted.

Justice Sodhi accepted the contention of the Hindujas that they were Bofors' consultants and notits agents.

Justice Kapoor had directed the trial court to prosecute the Bofors company for forgery on theassumption that the originals of the forged documents would be made available and produced asand when called for by the trial court. However, following the admission by the CBI that it didnot have the originals, Justice Sodhi quashed the trial court's order framing forgery chargesagainst the Bofors company.


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Analysts say that even if the CBI appeals against Justice Sodhi's judgment in the Supreme Court,it is not likely to pursue the case seriously, thus consigning the Bofors scandal to the historybooks.

THE political impact of Justice Sodhi's verdict has to be seen in the isolation of the Congress on

the issue. The Congress demanded an apology from all those who had launched an"unsubtantiated and baseless" campaign against Rajiv Gandhi on the Bofors issue. Askedwhether this included former Prime Minister V.P. Singh, former Opposition leaders now in theparty and the government and the current allies, the party spokesperson, Jayanti Natarajan said:"We are leaving none. This includes a wide spectrum."

The demand for an apology, however, had few takers. V.P. Singh maintained that he had nevermade any allegations against Rajiv Gandhi on the Bofors issue. He recalled that his governmentdid not name him [Rajiv Gandhi] in the FIR filed in 1990. V.P. Singh claimed that though he hadcampaigned on the Bofors issue and become Prime Minister after the 1989 elections, he hadnever alleged that Rajiv Gandhi himself was the beneficiary of the Bofors payoff.

The Communist Party of India (Marxist) demanded that the CBI revive the Bofors case throughappropriate legal processes. "It is surprising that after such a long investigation, such infirmitiesand elementary errors existed in preparing the case," the party's Polit Bureau said. The partylamented that neither the CBI nor the judicial process in the country had been able to produce averdict in any high-level corruption case. This had led to the people feeling that the system wasincapable of bringing to book those who misused public funds, it added.

Bharatiya Janata Party general secretary and spokesperson Arun Jaitley alleged that there was aclear collusion between the CBI and the accused in the case as was evident from the collapse ofthe charges against the Hindujas and the Bofors company after the verdicts of the Delhi High

Court in February 2004 and now. These judgments may be erroneous, but they pleased theaccused and the political masters who ran the Central government, he said. He feared that theCBI would obviously decide to let the erroneous judgments stand.

But the lingering question remained unanswered by the BJP: Why did the National DemocraticAlliance government, which was in power until May 2004, not appeal against the Delhi HighCourt's February 2004 verdict quashing bribery charges against the Hindujas? The CBI's failureto file a special leave petition meant that it became the basis of the recent Sodhi judgment bydefault.

CBI seeks time to mull on Quattrocchi's case

New Delhi, April 30: A Delhi Court on Thursday adjourned till September 8 the hearing in the

Bofors payoffs case against Italian businessman Ottavio Quattrocchi after the CBI sought two

months time to decide further course of action against him following his name being withdrawn

from the list of wanted persons.


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During a brief hearing before Chief Metropolitan Magistrate Kaveri Baweja, Additional Solicitor

General PP Malhotra, appearing for CBI, filed an application informing the court that the Red

Corner Notice issued against Quattrocchi was withdrawn in November last year.

The court then inquired as to what options were left with the prosecution in the case againstQuattrocchi.

"There were eight accused in the case. Three are already dead, four were acquitted by the

Delhi High Court in February 2004. Various attempts to get Quattrochi extradiated to India have

failed," the ASG said, sidestepping the question put to him.

In her order deferring the hearing till September 8, the Magistrate said, "An application filed on

behalf of CBI seeks period of two months to decide further course of action in the matter."

It is stated that during the course of investigation, the Red Corner Notice was recalled.

Extradition proceedings have not been completed for various reasons," Baweja said.

The Interpol had withdraw the Red Corner Notice against 70-year-old Quattrocchi, which was

first issued against the Italian businessman in 1997, following a communication from the CBI.

Meanwhile, Union Law Minister HR Bharadwaj has once again said that nothing is left in the

Bofors case and only politics is being played. He further said that there is no reason to proceed

with this case.

Quattrocchi has not appeared before the court to face trial in the case and, as a result, charges

could not be framed against him despite two chargesheets filed in the case. Subsequently he

was declared an absconder.

The court had on February 10, 1997 send letters to Malaysia and the UAE seeking the arrest

and extradition of Quattrocchi.

CBI had registered the FIR in the Bofors case on January 22, 1990, three years after Swedish

Radio on April 16, 1987, claimed A B Bofors, the makers of the 155 mm howitzers, had paid

kickbacks to top Indian politicians and key defence officials to secure the Rs 1,437 crore gun

deal.


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The contract between the Indian government and the Swedish Company for the supply of 400

field guns was signed on March, 24, 1986.

CBI had filed the first chargesheet in the case on October 22, 1999 naming Win Chadha,Quattrocchi, former Defence Secretary S K Bhatnagar, former Bofors chief Martin Ardbo and

Bofors company as accused.

The investigating agency on October 9, 2000 had filed a supplementary chargesheet naming

Hinduja brothers- Srichand, Gopichand and Prakashchand - as accused in the case. The

charges against them were quashed by the Delhi High Court on May 31, 2005.

An overview compiled with inputs primarily from old Outlook records, The Indian Express and

agency reports - work in progress with gaps to be filled in yet)

March 24, 1986: The controversial contract for 410 howitzers is signed with Bofors.

April 16, 1987: National Swedish Radio announces that Bofors AB allegedly paid bribes to Indian

politicians and bureaucrats through Swiss banks to win the contract to supply 155-mm howitzer field

guns.

April 22, 1987: Swedish newspaperDagens Nyheter, quoting highly placed company sources in an

original report, identified the Hindujas as recipients of the "commission" paid by Bofors.

June 1, 1987: The National Audit Bureau of Sweden admits the payment of "winding up charges" of

Rs 34 crore to Rs 50 crore.

June, 1987:Army Chief Sundarji and Minister of State for Defence, Arun Singh (who years later

ended up working for the NDA government), advocate cancelling the contract with Bofors.

August 6, 1987: The Indian government sets up a joint parliamentary committee (JPC) to look into

the allegation of pay-offsunder the chairmanship of B. Shankaranand.

September1987:Per Ove Moresberg, chairman of Bofors AB and Lars Gothlin, chief jurist of Nobel

Industries, convey to India the names of three companies-Svenska Inc ofPanama, Moresco of

Switzerland and AE Services of the UK-which had received "winding up cost".


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April 25, 1988: The JPC presents its report to Parliament, saying it did not find any evidence of

middlemen or of any payment other than winding-up charges. The opposition had boycotted the JPC

and it turned out to be a whitewash, but still made some interesting revelations:. Bofors had not one

but two agents in India. In addition to Svenska (Win Chaddha was the signatory), there was also

Pitco (connected to the Hindujas) Bofors claimed the agreements with Pitco and Svenska had been

terminated after the government asked it to sack its agents and that the money paid to them was "

winding-up charges for terminating the contract". Bofors finally had no answer to the JPC's question

as to why then had it appointed a third agent, AE Services, when the deal was in its closing stages?

The JPC accepted the explanation offered by Bofors that it was a British firm headquartered in

Guildford, Surrey, owned and promoted by a Major Bob Wilson.

1989: By late-1989, a great deal of further evidence and information, notably from the Martin Ardbo

diary entries and notes for 1987 seized by the Swedish police had led to interesting speculation and

revelations. Those who helped him in the cover-up were called Hansens - who lived in London and

India and one of them was called GPH, clearly a reference to the Hindujas and G.P. Hinduja. GPH's

enemies were Serge Paul and Nero. Now the Hindujas' scrap with Arun Nehru and Swaraj Paul was

hardly a secret. Ardbo described meetings with a Gandhi trustee lawyer to finalise details of the

cover-up, wrote that he no longer cared about the consequences for N ( Arun Nehru) but Qs

involvement could be a problem because of closeness to R. Q and R, given the context, were

clearly seen as Quatrocchi [Q had shifted to India from Italy soon after Rajiv Gandhi married Sonia

and stayed in Delhi as a representative for Snamprogetti from 1964 to 1993]and Rajiv Gandhi. In

any case, Rajiv Gandhi lost the elections largely fought around the issue of Bofors. V.P. Singh was

PM.

January 22, 1990: Finally, the CBI files its First Information Report in a Delhi court. The FIR names

Martin Ardbo, Win Chadha, G.P. Hinduja and others.

January 26, 1990: Swiss bank authorities freeze the accounts concerned on a request from the V.P.

Singh government. Additional Solicitor General Arun Jaitley accompanied CBI Jt. Director K.

Madhavan to Sweden

February 1, 1992: P.V. Narasimha Rao's minister for external affairs, Madhavsinh.Solanki hands

over an unsigned memorandum to the Swiss foreign minister Rene Felber to go slow on Bofors.

Details leak, Solanki declines but has to resign and faces oblivion.


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January 1993: The Geneva Cantonal Court grants assistance to India in the first round of its

proceedings in the case. Appellants - Win Chaddha, Quattrocchi and Hindujas - oppose move the

Swiss Federal Court.

July 12, 1993: The Swiss Federal Court rejects the appeals and asks the papers to be handed over

to India.

July 29, 1993: Quattrocchi flees India for Malaysia. The Indian Express's Chitra Subramaniam

(earlier with the Hindu) had produced documents suggesting that some of the money that had been

paid by Bofors to AE Services [Earlier widely speculated to be a front set by up by Swaraj Paul for

Arun Nehru] as commissions had been diverted from a Swiss bank account to another account, the

ultimate beneficiary of which was Quatrocchi. Opposition had asked for his passport to be

impounded, but Narasimha Rao's government didn't bat an eyelid.

June 7, 1994: The names of seven appellants in the Swiss courts, including the Hindujas, Italian

businessman Ottavio Quattrocchi and Bofors' agent in India, Win Chadha, are made officially public.

October1996: The Geneva Cantonal Court rules in favour of India in the final round; six appellants

again move the federal court to block the transfer of the documents.

November26, 1996: Appeals rejected.

January 21, 1997: Joginder Singh, specially appointed CBI directorby Deve Gowda, goes to Berneto receive secret bank documents.

February 20, 1997: The CBI team returns to India from Malaysia after failing to secure Quattrocchi's

arrest.

October22, 1999: Finally, with the BJP in power, the CBI files the chargesheet in the case. It

names former prime minister Late Rajiv Gandhi, formerunion minister Madhavsinh Solanki, Gopi

Arora, special secretary to the prime minister, former defence secretary S.K. Bhatnagar, Quattrocchi

and his wife Maria, Win Chadha, his late wife Kanta and son Harsh Chadha.

October9, 2000: CBI files chargesheet against the Hindujas, their share said to be routed through

McIntyre Corp

December19, 2000: Quattrocchi is arrested in Kuala Lumpur for "offences allegedly committed in

India" and is released on bail of RM 400,000 (Rs 50 lakh).


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December 2002:Malaysian sessions court rejects India's appeal for extraditing Quattrocchi to stand

trial in India, says the description of offences were "insufficient, vague and ambiguous". The same

day, India's Supreme Court stayed the trial proceedings before a special court against the Hinduja

brothers

June 2003: CBI is alerted by the Interpol on Quattrocchi's Rs 21 crorers routed through Bahamas in

his London accounts in BSI AG Bank. Accounts are frozen in July on CBI's request. CBI promises to

provide clinching evidence linking the London accounts with the Bofors case.

February 4, 2004: The Delhi High Court rules that the CBI had failed to provide any information of

accounts held by the formerPM and officials like ex-defence secretary S.K. Bhatnagar. The court,

however, does not let the Hindujas and the Gandhis Italian friend, Ottavio Quattrocchi, off the hook.

NDA, surprisingly does not file appeal against the order, and buoyed by this, Sonia Gandhi kicks off

the 2004 general campaign, flanked by Rahul and Priyanka, by telling the media: "We have gone

through 17 years of abuse, 17 years of vilification since the first accusation to the last indignation

inflicted by the BJP-led NDA government by placing my husband's name on the chargesheet"

March 31, 2004: Kuala Lumpur Federal Court rejects the Indian appeal for extradition of Q against

the session court's order. By November, Q has moved from Kuala Lumpur to Milan.

April 8, 2004: The Asian Age publishes 'Bofors truth points to Quattrocchi, Sonia' which insisted that

'Sonia Gandhi must be questioned' by Sten Lindstrom who, in an 1998 interview to Outlook had

claimed that 'The Bofors Papers All Point To The Gandhi Family'

December9, 2004: Earlier in the year, Stephen Hellman, counsel for the Crown Prosecution

Service, had suggested to CBI that to keep the two Q accounts in London frozen, it should declare

Quattrocchi a proclaimed offenderunder Section 82 of CrPC and attach his properties under Section

83. (as reported by Ritu Sarin in The Indian Express on January 13, 2006)

ASG B. Dutta in a written opinion, in response, dated this day, argued that since Quattrocchi wasnt

an Indian or resident in India, Section 82 of the CrPC could not be applied to him. He also added

that the CBI had no evidence linking "the commission of the offence" with the "derivation of funds."

According to him, a warrant of arrest is executable only in India as per Section 77 CrPC and "not to

any act on the part of the person concerned of absconding or concealing himself." The CBI

disagreed saying that a NBW was in force against Quattrocchi who was a fugitive under the

Extradition Act and that it is not mentioned anywhere that the CrPC applies only to Indian nationals.

The CBI also said that contrary to Duttas claims, a Letter Rogatory had been issued by the Indian


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Court which has been acted upon by UK authorities and even the High Court and Supreme Court,

London, have not raised any objection to or doubted the course of action adopted by the Indian

Court.

February 11, 2005: The Indian Express exposes the above serious disagreement between the CBI

and the law ministry on Q's frozen funds in two London accounts and how the law ministry's

influence could lead to the release of the funds.

May 31, 2005: Justice R.S. Sodhi of Delhi HC discharges the Hindujas. The reason? ASG B Datta

orally submits before the HC that the documents brought back from the Swiss were not originals or

"authenticated"! The Congress claims it was the NDA's fault not to have ensured authentication..

Meanwhile, Delhi is abuzz with the old 1998-elections buzz about the Hindujas and Atal Behari

Vajpayee (and also the old Arun Nehru - Nero in Martin Ardbo diaries - who has been with the BJP

for many years now).

[Updated on Jan 23, 2006:The Times of India reports on January 23, 2006, under the front page

story titled "Changing tunes of Defreeze man" that the same ASG B Datta had

"attested a CBI affidavit about the genuineness as well as the admissibility of the same set of

documents. The change of version is significant not just because it formed the basis for the HC

judgement discharging the Hindujas but also because this verdict was referred to by another ASG

KPPathak to give a clean chit to Quattrocchi. Pathak's opinion formed the basis for defreezing of

Quattrocchi's accounts in UK.

"...both ASG Datta and the CBI knew very well that the documents were authenticated by the justice

department of Sweden and could be treated as "admissible".

The CBI affidavit attested by ASG Datta in February 2005 and filed in the HC had stated:

"The documents in question which were contained in Volume XXII have been received from the

Swedish Ministry of Justice in execution of Letters Rogatory issued by the Court of Special Judge,

Delhi.

" The said documents duly initialled and authenticated by Per Hedvall, the then deputy director of

ministry of justice, Sweden, and forwarded through the Embassy of India Stockholm would be

admissible in evidence under Section 166-A of the Code of Criminal Procedure."


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"It is curious to note that the HC relied on the word of mouth of the ASG that the documents were not

authenticated but not on CBI's affidavit to the contrary. ... the CBI had reinforced its case by making

Per Hedvall as the prosecution witness to prove that the documents were authentic and that there

was no doubt on this score. ...the CBI also cited the following persons as prosecution witnesses:

1. R.K. Sachdeva, the then counsellor (HOC) in the Indian Embassy at Stockholm

2. Thomas Lindstrand, the then Chief District Prosecutor, Stockholm

3. Sten Lindstrom, Detective Superintendent, Economic Crime Bureau, Sweden

"Moreover, CBI was in February 2005 in receipt of an intimation from the Federal Department of

Justice and Police, Berne (Switzerland), that there is a good chance that the original documents,

copies of which were forwarded in execution of the Letters Rogatory, are still kept in the file of the

Examining Magistrate in Geneva. That no one pursued this intimation is a different story."]

October2005: The CBI prepares to challenge the ruling in the Supreme Court because the Swedish

Prosecutors Office had acknowledged the authenticity of the documents and then Swedish Special

Prosecutor Lars Ringberg was willing to testify. But given that the UPA government was in power

and did not go in appeal. Additional Solicitor General (ASG) K.P. Pathak when advising CBI not to

go in appeal against the May 31 2005 judgement exonerating the Hindujas, exceeds his brief, and

says that "even in the case against Quattrocchi would necessarily fail in view of the reasoning of the

high court since there too there are no authenticated documents."

October22, 2005: The CBI is served a notice by the Supreme Court on the basis of a PIL

challenging the move not to go for revision against Justice Sodhis High Court order.

November16, 2005: This is when CBI claims the Crown Prosecution Service (CPS) asked it to

provide evidence promised in June 2003 when Q's London accounts were frozen. CPS claims it had

been in touch with the CBI throughout since 2003 when the accounts were frozen and that no such

new specific request was made.

November26, 2005: Department ofPersonnel and Training (DoPT) overrules the CBI's request that

an agency official and a law officer should go to London, saying only only law ministrys ASG B.

Dutta would go. (The Indian Express, January 17, 2005 which also reports on the same day that

"CBIs Director ofProsecution, S K Sharma, a Law Ministry official posted in the CBI ... wrote that

would be a 'travesty of justice' if the CBI appealed against the Sodhi judgment")


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November28, 2005: Law ministry turns down CBI Director U S Mishra's request to file a Special

Leave Petition (SLP) challenging the May 31, 2005 High Court order exonerating the Hindujas

passed by Justice R S Sodhi.

December20, 2005: The CBI says in the court of Chief Metropolitan Magistrate Seema Maini, that

to "apprehend the accused (Quattrocchi)," a Red Corner Notice was "still in existence" and details of

"the present whereabouts of the accused would be submitted soon to the court. (Ritu Sarin in The

Indian Express, January 19, 2005).

December22, 2005:ASG B. Dutta goes to London. Look at what he takes along: orders of the

Kuala Lumpur courts turing down Quattrocchis extradition request, the order of thhe HC dismissing

the case against Hindujas and the legal opinion by K.P. Pathak (who had dismissed the case against

Q). He meets the CPS paving the way for the accounts to be defrozen.

Earlier, the same B.Dutta had (as per the Indian Express of Jan 17, 2006) "disagreed with the CBI

on how to handle the issue of frozen funds and the legal course of action. He had said that the

agency has "no justification" blocking the funds."

December27, 2005: Dutta submits his report on the visit to the CBI but according to top officials (cf,

The Indian Express, Jan 17)"defreezing of the accounts ... never figured in either Duttas briefings

with the CBI prior to his visit or in his report. He just briefs them about the documents taken by him

and presented to the CPS.

January 11, 2006:A newschannel, CNN-IBN News breaks the story of the defreezing of accounts.

January 12, 2006:

y This is when CBI was informed about defreezing of the accounts by an e-mail from the CPS.And this is apparently when the money disappeared from the account (Q waited a day? Mostlikely it was on January 11 itself, and still needs to be cross-checked) A top CBI official tellsthe Indian Express: "While we knew we do not have clinching evidence to link the Boforspay-offs to the frozen funds, we were taken aback at how quickly the defreezing order waspassed."

y When asked, law minister Bhardwaj is brazen: "The Crown Prosecution had sought thestatus of the investigation and we have conveyed to them the recent rulings of the HighCourt rejecting the case against the Hinduja brothers. The CBI has failed to establish any linkbetween the Bofors pay offs and the money in two British accounts of Quattrocchi. So howcan we penalise him? It is wrong to keep someone's money frozen if there is no proofagainst him ... The Director (Prosecution) of CBI had said there was no case for going intoappeal [against the Hinduja judgement] and the Additional Solicitor General had agreed withthis."


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y Advocate Ajay Agarwal files a petition in the Supreme Court against the government claim tothe CPS that there was no link between the funds in two frozen accounts of Quattrocchi andthe Bofors payoff case.

y The Chief Metropolitan Magistrates court in New Delhi directs the CBI to file a status reportby March 31 on the steps taken to extradite Quattrocchi

January 13, 2006: PM and law minister Bhardwaj meet. PMO sources claim the PM was not kept

informed. PM also meets minister for science and technology, Kapil Sibal, and minister of state for

personnel, Suresh Pachouri and is said to have asked the latter (since the PM is also the cabinet

minister for personnel) why he was not kept informed. In that case, "Bhardwaj should be dismissed

forthwith" demands the BJP. Congress, meanwhile, claims that it "has nothing to do with it. The

Congress stand is crystal clear: the law must take its course and the guilty must be punished.". Yes,

we have heard that one before. Options suggested to the PM include asking the UK authorities to

restore status quo and not to take note of the ASGs communication. But of course no such thing is

done.

January 14, 2006: Sonia and Manmohan meet. Also present are defence ministerPranab

Mukherjee, home minister Shivraj Patil and Sonias political advisor Ahmed Patel. They claim it was

a routine meeting. Rumours fly thick and fast about Bhardwaj being sacked.

CBI meanwhile says that it has drafted a fresh Letter Rogatory to be sent to Berne, Switzerland, the

defrozen amount in the two London accounts came from here. Claims it has also begun extradition

proceedings to get Quattrocchi from Italy and awaits government permission to proceed.

January 16, 2006:

y In an interim order, a SC bench, headed by Chief Justice Y K Sabharwal, directs thegovernment and the CBI to maintain "status quo ante" on Q's two London accounts anddirects they should ensure no money is withdrawn "if not withdrawn so far". In case of offunds withdrawal, the government and the CBI are asked to explain steps taken in anaffidavit, asking them to reply within a week -- fixing the next hearing for January 23. Thebench also asks the government to make clear who instructed ASG Dutta to okay de-freezing of the accounts.

y CBIs comes to the aid of a beleaguered law ministry and despite various flip-flops and off-the-record briefings to the media backed by supporting documents about the governmentpressure, backs the Department ofPersonnel and Training (DoPT) and the law ministry.Joint director A K Majumdar says it was "purely" the CBIs decision to send AdditionalSolicitor General B Dutta to London and that "neither ministry had any role to play" in theJanuary 11 order de-freezing Q's two London accounts.

y The PM finally speaks in Guwahati:

"My government has never interfered with the CBI in matters of investigation. A controversyis sought to be created about certain steps taken by the CBI in the matter relating to thefreezing of the Quattrocchi bank account. Actions relating to both freezing and unfreezing


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these accounts have been taken at the level of the CBI in consultation with law officials asper established procedure.

"Neither the freezing was under government order nor has the defreezing been done undergovernment order. These matters are exclusively under the functional jurisdiction into whichthe government does not interfere. All steps taken in the matter are in accordance with

established standard procedure in such cases. The autonomy of the CBI will be preserved inthis government at all cost."

January 17, 2006:

y Defence ministerPranab Mukherjee says: "We have no jurisdiction on other countries. Wecan at best make a request to them (Britain)," and that "views of legal experts will be taken"whether or not the government would make any formal request to British authorities.

y Sonia Gandhi tells Sitaram Yechury of the CPM that the government had no advanceknowledge of the CBI decision to allow defreezing of Ottavio Quattrocchis London bankaccounts. Yechury says after an hour-long meeting with her that she had told him the

government was not pressuring any agency [surprise surprise] on the course of theinvestigation which in any case "should reach a conclusion soon, because in her opinion ithad dragged on for too long"

y Quattrocchi, meanwhile, denies reports from Milan to NDTV that he was in touch with lawminister H R Bhardwaj or that the latter's lawyer son had advised him in his extradition casein Malaysia. "This is not correct, not at all correct". On proximity to the Gandhi family, hesaid, "Well, I am proud to be a friend of the Gandhi family. But please leave the friendshipalone."

y Given the gravity of the matter, in an unprecedented move, the Central VigilanceCommission (CVC) says they have "asked the CBI for a complete factual position on thecase"The CVC tells the Indian Express, "There appear to be seeming contradictions in thestatements made by the agency a few days ago and in the press conference addressed by aJoint Director. That is why we have asked for the facts of the case.". On the PM's talk of theCBI autonomy, the CVC says that he addresses the subject in his 2004 annual report:"Appeals to be preferred against lower court judgments by CBI are also subject togovernment approval through the law ministry again. This compromises the independence ofthe CBI."

THE BOFORS CASE

Off the hook

V. VENKATESAN

Ottavio Quattrocchi walks free after the Indian government decides not toappeal against an Argentine courts rejection of its plea to extradite him.


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THE entry on physical description for Ottavio Quattrocchi, wanted by Interpol, NewDelhi, for his role in fraud and bribery in the Bofors pay-off case, on the website of theCentral Bureau of Investigation (CBI) reads:

Height: not known

Colour of eyes: not known

Colour of hair: not known

Distinguishing marks: not known

Characteristics: not known

That the CBI could not provide a physical description of the well-known accused very

often shown on television may well suggest its lack of seriousness in seeking hisextradition despite the fact that it did not prevent the Argentinian authorities from

detaining him on February 6 on the basis of an Interpol red corner notice issued in1997. But the story of how Quattrocchi succeeded in leaving Argentina for Milan, Italy,on August 15 after getting back his travel documents reveals the investigating agencysconnivance at derailing the extradition proceedings against him.

Quattrocchi got bail in February itself, but was barred from leaving Argentina until theextradition proceedings finally concluded. On June 8, Judge Mario Harichi Doi of theFirst Court in El Dorado, Argentina, rejected, on technical grounds, the Indiangovernments request for extraditing Quattrocchi to India. The Judges objection,

according to reports, was that the fresh arrest warrant issued by a Delhi court onFebruary 24 did not spell out the reasons why Quattrocchi ought to be arrested.

Quattrocchis detention on February 6 was carried out on the basis of the arrest warrantwithout bail issued by the Special Judge, Delhi, on May 25, 1997. So the Indian

government, Judge Mario Hachiro Doi said, should have attached a certified copy ofthat judicial decision which ordered the detention but instead, only the arrest warrant ofFebruary 24 had been tagged. Even this warrant the Judge said, did not specify thereasons for detention and for the request of extradition. This was a fundamentalrequirement for not dismissing the request for extradition, the Judge said.

Under Argentine law, the lower courts decision would be challenged automaticallybefore the Supreme Court by the public prosecutor unless the government specificallyasked him not to.

Only on July 28 the CBI filed a status report in the court of the Chief MetropolitanMagistrate (CMM) in Delhi which is the court where the Bofors case is being heard andQuattrocchi is listed as an absconding accused that an appeal had been filed. TheCBIs status report stated: It is further informed that an appeal against the orderdated June 8, 2007 of the Federal Court [rejecting the CBIs extradition request] as ismandatory as per Argentine law, has been filed by the Argentine public prosecutor in

the Federal Court of El Dorado.


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According to reports, Lilian Delgado, the Argentine public prosecutor hired by thegovernment in March to press for Quattrocchis extradition, confirmed on August 15that the Indian government had decided to withdraw the appeal. Indian Ambassador

Pramathesh Rath handed over a formal communication to the Argentinian ForeignOffice asking to withdraw the Supreme Court appeal. CBI Director Vijay Shankar wasapparently unaware of the appeal being filed and withdrawn.

Precisely who in the Indian government advised Lilian Delgado to withdraw the appeal

and on what grounds it was done remains a mystery.

The Supreme Court, while hearing a petition filed by Ajay K. Agrawal on August 20,directed the CBI to place before it the order of the Argentinian Judge rejecting theextradition request. Agrawals petition followed the CBIs failure to file an appeal

against two verdicts of the Delhi High Court in the Bofors case. Agrawal had alsochallenged the Indian governments role in defreezing Quattrocchis bank accounts inLondon, enabling him to withdraw the entire money deposited in the accounts.

The CBIs status report did not refer to the specific grounds cited by the Argentinian

Judge for rejecting the extradition request. According to the report, the request wasdeclined because Quattrocchis detention was illegal as it was not supported by areasoned order of the Indian court and because the non-bailable warrant issued by theCMM, Delhi, on February 24, though supported by an order, was not adequate.

Agrawals application has raised disturbing issues concerning the CBIs handling of thecase. Citing newspaper reports, he alleged that CBI officials passed on opinions ofLaw Officers and of its own officials to Quattrocchis counsel to facilitate its owndefeat in court. [The] CBI was neither serious nor sincere in its efforts to secure hisextradition, Agrawal alleged.

An important newspaper report the CBI has so far not rebutted is the one quotingQuattrocchis counsel, Free Land. The Sunday Express of June 10 quoted him as sayingthat among the papers he presented to the Judge was the opin ion of S.K. Sharma,CBIs Director of Prosecution who was, ironically, present in the El Dorado courtroom that the entire Bofors investigation had become untenable and that there was no

case. Free Land continued: It was this opinion in 2005 that led to the CBI not filing anappeal against the Delhi High Court ruling by Justice R.S. Sodhi dismissing the caseagainst [the] Hindujas.

Doubts have also arisen whether the CBI rebutted effectively the arguments of

Quattrocchis counsel against extradition. One of the pleas of his counsel was that thewarrant produced by the CBI was silent on the two Delhi High Court judgments in the

Bofors case. On February 4, 2004, Justice J.D. Kapoor dismissed the charges againstthe various accused in the Bofors pay-offs case. He held that Quattrocchi could becharged only with conspiracy to cheat. In May 2005, Justice R.S. Sodhi gave a cleanchit to the Hinduja brothers..

On February 24, 2007, the CBI obtained a fresh non-bailable warrant of arrest againstQuattrocchi under Section 120-B read with Section 420 of the Indian Penal Code(dealing with conspiracy and cheating respectively) from the court of the CMM, Delhi,

as the previous non-bailable arrest warrant, dated February 6, 1997, had been issued


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by the Court of Special Judge, Delhi, under various provisions of law, including thePrevention of Corruption Act (PCA).

In his February 2004 order, Justice Kapoor quashed the charges under the PCA, makingit necessary, it would seem, for the CBI to obtain a fresh warrant. But the question whythe CBI did not obtain a fresh warrant immediately after the February 4, 2004, order

remains unanswered. The fresh warrant was obtained after Quattrocchi was detained inArgentina on the basis of the old warrant whose legal validity had come under a cloud

following Justice Kapoors order. If the cheating and conspiracy charges survived underthe old warrant, there was no need to obtain a fresh warrant after Quattrocchisdetention in Argentina.

The red corner notice was issued against Quattrocchi on February 17, 1997, although

he had left India in 1993 under mysterious circumstances. His trial was separated fromthat of the other accused in 2001.

Case in Malaysia

In 2003, the CBI attempted to seek Quattrocchis extradition from Malaysia. The Indiangovernment contested the matter before Malaysian courts. The Sessions Court in

Malaysia held that under both Malaysian law and Indian law conspiracy and cheatingwere two separate offences, but when read together they gave rise to duplicity ofoffences, resulting in ambiguity.

As a consequence, the Sessions Court concluded there was no clear indication of the

description of the offence that was committed. Therefore, it was not possible for thecourt to determine whether the offence was an extradition offence under Section 6 ofthe Malaysian Extradition statute.

The High Court of Malaysia held that the identification of the corruption offence allegedto have been committed by Quattrocchi was open to doubt. The thrust of the cheatingoffence against Quattrocchi was the receipt of money by him following the appointmentof A.E. Services Limited of the United Kingdom, at his behest, as the consultants ofBofors.

The High Court of Malaysia pointed out that paragraph 13 of the charge sheet of theIndian trial court referred to the prohibition on the appointment of agents as thepresent government did not approve of the appointment of Indian agent[s] acting forforeign suppliers.

The court then noted: When I invited the prosecution and the two counsel to submit

on them there was no positive response worthy of consideration. These facts cannottherefore be termed or treated as particulars for the offence of cheating from thedocument made available. Thus, the High Court affirmed the order of discharge passedby the Sessions Court and dismissed the Indian governments application for

extradition. Both the Court of Appeal and the Federal Court of Malaysia dismissed theIndian governments appeals.

In 2006, the CBI defended before the Supreme Court its decision to defreezeQuattrocchis accounts in London by claiming that there was no evidence to link the


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funds in the London accounts with the proceeds received by Quattrocchi allegedlythrough A.E. Services. Secondly, the CBI claimed there was imminent unlikelihood ofsecuring his presence in India for completing the trial.

After the failure of the extradition case in Argentina, Vijay Shankar said the CBI wouldcontinue to pursue his extradition and the red corner notice against him would survive

as long as he was wanted by an Indian court. Going by the experience so far, it couldbe an exercise in futility.

Documents

39997921 Bofors Scandal