Bofors is Back: DNA revisits dramatic twists & turns and brazen cover-ups in India's longest-running criminal investigation

On October 31, 1984, the day Prime Minister Indira Gandhi was assassinated, the Congress turned to her son for leadership. Forty-year-old Rajiv Gandhi, who had three years of experience as a Parliamentarian, became India's youngest Prime Minister. In less than two months, he rode a wave of sympathy and won a mind-boggling mandate — about 80 per cent of the seats his party contested.

A year later, the Congress was celebrating its centenary. Of more than 7,000 words Rajiv used in his 75-minute presidential address, a few against "the brokers of power and influence" caught people's imagination. Many began to show belief in his intent. He came across as Mr Clean that India was yearning for.

Meanwhile, in the Finance Ministry, Vishwanath Pratap Singh did not take long in earning popularity as an honest politician, but through his actions — high-profile tax raids. On January, 23, 1987, his boss shifted him to the Defence Ministry because of "border situations".

Soon, it emerged that Singh, as Finance Minister, had hired private American detective agency Fairfax to investigate money-laundering and asset transfers by NRIs in violation of currency control laws. The move caused an uproar. His own party attacked Singh. The government ordered a commission to probe the hiring. Fairfax was a front for US spy agency CIA to destabilise India, it was alleged. Singh was also not sitting quiet in his new office. He had received information that kickbacks had been paid in a submarine deal with German firm HDW. He ordered an inquiry, causing much agony to the Prime Minister who had promised middlemen-free defence procurements.

The relationship between the two leaders further deteriorated. Singh quit as minister on April 12.

Bofors Breaks

Four days later, on April 16, a broadcast on Dagens Eko, the news wing of Swedish public radio, was to change Indian politics forever. It alleged that arms manufacturer Bofors AB had bribed Indian politicians and officials to win a contract to supply 410 155mm howitzers to the Army. The Rs 1,437-crore deal had been signed on March 24, 1986, when Rajiv was himself the Defence Minister. Though Sofma of France was ahead in evaluations, reports said.

The broadcast mentioned Bofors' agent in India, Win Chadha. But it would soon emerge that Italian businessman Ottavio Quattrocchi, who was close to Rajiv's family, was Bofors' chief negotiator in India. Four days after the Dagens Eko broadcast, Rajiv told Parliament that no kickbacks were paid and no middlemen were involved in the deal. A week after the scandal broke, two Swedish reports alleged that business brothers — Srichand, Gopichand and Prakash Hinduja — had received a commission from Bofors.

A Govt Falls

India's own Watergate engulfed the government and the ruling party. It reached the doorsteps of the Prime Minister and was directly connected to the country's defence. Meanwhile, Fairfax had stumbled upon some of the Bofors money trails and was investigating them. A furious Rajiv addressed a rally in Delhi on May 16 and asked people to beware of "traitors who had joined hands with foreign powers to destabilise the nation." Singh called a press conference the next day and returned fire. As more and more people started raising their voice, Singh and many others from the Congress were thrown out in July.

A Joint Parliamentary Committee (JPC) gave a clean chit to Rajiv on the eve of the general elections in July 1989. This further swung the public mood. Three months later, Singh forged Janata Dal. He called the Prime Minister a "power broker" and projected himself as an anti-corruption mascot. Thousands of people took to the streets that year. Bofors had created a political star. It had also tarnished a star's image irreparably. In November, Rajiv lost power. Singh had dethroned him. But India's biggest scandal continues to haunt the Nehru-Gandhi family and the grand old party.

The Genesis

How did the India angle in the Bofors scandal surface The Swedish police was investigating Bofors. Some documents showed instructions to Swiss banks that the name of one of the funds' recipients should not be revealed. This caused suspicion. Then more documents were found. Some entries in the diary of Martin Ardbo, managing director of Bofors during 1982-87, were startling. He wrote about 'N' and said the identity of 'Q' should not be revealed because he was close to 'R'. Many believed 'N' was Rajiv's cousin and ministerial colleague Arun Nehru, 'Q' was Quattrocchi and 'R' was Rajiv himself.

Singh blacklisted Bofors. On January 22, 1990, the CBI registered an FIR for criminal conspiracy, cheating, forgery and corruption against Ardbo, besides Win Chadha and the Hindujas. The allegation was, Rs 64 crore had been paid in kickbacks. On India's request, Swiss authorities froze accounts of Panamanian company Svenska and shell firm AE Services, which allegedly received unauthorised commissions for the deal. The Hindujas were said to be controlling a firm called Pitco. Svenska's Swiss account was said to be controlled by Chadha. Through AE Services, bribes paid by Bofors landed in Quattrocchi's account.

Probe Faulters

Singh's government fell in nine months. Rajiv was assassinated by the LTTE while he was campaigning for a return to power in 1991. Allegations surfaced that the accused were being saved. In 1992, during the Congress rule led by PV Narasimha Rao, Foreign Minister Madhavsinh Solanki had to quit following charges that he had asked Swiss authorities to go slow on the probe. Next year, Quattrocchi fled India on Rao's watch.

In 1997, the Congress was out of power. Swiss banks released some 500 documents after a prolonged legal battle. The CBI set up a special team and filed cases against Rajiv, Quattrocchi, Chadha, Defence Secretary SK Bhatnagar, Ardbo and Bofors. Efforts were made to bring back Quattrocchi and Chadha. On October 22, 1999, during the NDA's rule, the CBI filed a chargesheet against Rajiv, Solanki, bureaucrat Gopi Arora, Bhatnagar, Quattrocchi and Chadha,besides others.

Case Collapses

In 2000, the CBI filed a supplementary chargesheet, naming the Hinduja brothers. Quattrocchi was arrested in Malaysia for "offences allegedly committed in India," but India failed to bring him back. Investigations suffered more setbacks next year when Bhatnagar and Chadha passed away. In 2004, the Delhi High Court cleared Rajiv and Bhatnagar, and directed Bofors be charged for forgery. The same year, Ardbo also passed away. On May 31, 2005, Justice RS Sodhi of the Delhi High Court cleared Hinduja brothers and Bofors — the government had submitted that the documents brought back from the Swiss were not originals or authenticated.

Sodhi agreed to speak to DNA but refused to comment much on his judgement. "It's not proper for a retired judge to comment on his judgement. Mine is a speaking order. I have said there that the investigation had already cost the exchequer about Rs 250 crore with no results. My judgement was based on the material that was available. I could be wrong, I could be right, but that is for somebody else to judge. It's open to courts," Justice Sodhi told DNA.

He also hints at politics behind a renewed talk to reopen the case. "It's like flogging a dead horse. The case has gone on and on and on. Politics is a wonderful game. It's been played generation after generation. It will continue to be played like that. It's good. Enjoy," he said. BJP leader Ajay Agarwal had filed a petition in the Supreme Court against Sodhi's order. "It was because of the pressure from the then UPA government that the CBI did not file an appeal in the Supreme Court," says Agarwal.

The same year, India requested the UK that Quattrocchi's two bank accounts in London be unfrozen. The premise was, there was insufficient evidence to link them to the kickbacks! In 2006, the Supreme Court directed the Indian government to ensure that Quattrocchi did not withdraw money from the two accounts. The CBI then admitted that Rs 210 million in the two accounts had already been withdrawn by the accused. The CBI informed the court that it was still pursuing extradition orders for Quattrocchi. In 2007, Quattrocchi was detained in Argentina. But India lost the extradition case and did not appeal the order.

In 2009, Manmohan Singh's government informed the top court about its decision to withdraw the case against Quattrocchi because extradition efforts had failed. India's premier investigating agency withdrew the red corner notice against him. In 2011, a special court in Delhi allowed the CBI to drop all charges against Quattrochhi and close the case. The court said the country cannot afford to spend hard-earned money on his extradition that has already cost Rs 250 crore. This was despite a 140-page ruling of the Income Tax Appellate Tribunal, India's highest revenue agency and a quasi-judicial institution, which said illegal commission was indeed paid to Quattrocchi and Chadha that cost the exchequer Rs 412.4 million.

Cover-up & Exposé

In 2012, Lindstrom said that there was no evidence that Rajiv took a bribe, but indicted him by saying that the then Prime Minister had done nothing to prevent a cover-up. Former CBI director Dr AP Mukherjee wrote in his book Unknown Facets of Rajiv Gandhi, Jyoti Basu and Indrajit Gupta in 2013 that Rajiv wanted commission paid by defence suppliers to be used to meet the expenses of running the Congress. Lindstrom also described the evidence against Quattrocchi as "conclusive." In 2013, Quattrochi died of a heart attack in Milan.

Lindstrom confessed to being the person who leaked more than 350 documents to an Indian media house, which picked up and — along with other outlets — pursued the story that had originally broken on Swedish radio. Bofors also marked a watershed in Indian journalism. Lindstrom acted like Mark Felt, the mysterious "Deep Throat" source who had helped Washington Post reporters Bob Woodward and Carl Bernstein crack the Watergate scandal that brought down President Richard Nixon.

Ghost Returns

In July, 2017, a Parliamentary panel suggested, the CBI should reopen the Bofors probe. Last month, the agency told the panel that it had been denied permission from the then Congress-led UPA government to approach the Supreme Court against the 2005 Delhi High Court order. The scandal again returned to haunt the Congress this month when DNA carried an exclusive interview of Fairfax Group CEO Michael Hershman who made sensational allegations against Rajiv. Hershman told DNA that Bofors had paid millions of dollars to Indian politicians and also said he was offered money thrice — twice to stop the investigation and once to damage the reputation of VP Singh. He said he was given death threats to stop the investigation.

Major General (retired) Ashok Mehta, who was with the Defence Planning Staff when the Bofors controversy arose, says, "The reason this issue has stayed alive is political. There's no doubt that the money reached some of those close to the Gandhis. But the only issue I'm concerned about is this — as a piece of equipment, the Bofors gun was par excellence. Nobody can question its operational capabilities." Mehta is proud that the gun held India in good stead during the 1999 Kargil conflict. "Even today, it is serving us well. The Dhanush howitzer that the Ordnance Factories Board has developed is based on Bofors' design," says Mehta.

What Next

The CBI took note of the DNA interview and said it will probe the new revelations. On October 20, the agency asked its administrative department, the Department of Personnel and Training, to reconsider the 2005 decision on the Bofors probe, ahead of the Supreme Court's hearing on Agarwal's petition on October 30. The agency has said it wants to move the Supreme Court to challenge the Delhi High Court judgement. It is learnt to have asked key officers to locate the "buried" Bofors files and prepare a fresh list of witnesses and accused who are "still alive". The CBI is also planning to constitute a new team to re-investigate the case and contact earlier investigators. Looks like there are many twists and turns left in the longest-running criminal investigation in India.

Gun That Held India in Good Stead

Bofors is a 155mm 39-calibre field howitzer with a range of 25-30 km. It is operated by a six-member crew and can fire at the rate of 10 rounds per minute. The government has asked the Ordinance Factory Board to upgrade the Bofors technology and produce guns to meet the Army's needs. In May, the Army received two howitzers from the US as part of a Rs 5,000-crore order for 145 guns. It was a first howitzer deal in three decades since the Bofors scandal that stalled any such procurement. The complete consignment from the US will be received by mid-2021.

Kargil Boom

It was in 1999 that Bofors guns were used extensively during a three-month conflict between India and Pakistan in Jammu and Kashmir's Kargil. India pounded enemy-held positions with great precision and recaptured the lost territory. The government lifted its blacklist on Bofors. "I told everyone the guns were excellent. The problem was in the procurement process," former Swedish police chief Sten Lindstrom, who led the Bofors probe, was to say years later.

The Hindujas

Business brothers Gopichand, Prakash and Srichand Hinduja. Cleared in 2005. An appeal is to be heard in SC on Oct 30.