Sources told DNA that the actual amount of illegal commission paid may have been even higher at 9%.
A consortium of powerful arms dealers from India and Israel was deployed by cash-strapped Israeli defence equipment companies to swing the Rs10,000 crore medium-range surface-to-air missiles (MRSAM) deal with the defence ministry.
The contract was signed on February 27 with Israel Aerospace Industries (IAI), and it included a controversial payment of Rs600 crore (6% of contract value) as “business charges”.
Sources told DNA that the actual amount of illegal commission paid may have been even higher at 9%, and two of India’s powerful arms dealers may have joined hands with two of Israel’s in closing the deal on the eve of the elections.
The contract includes joint development of the missiles in association with the Defence Research & Development Organisation (DRDO). In a series of investigative articles over the past week, DNA showed how the UPA government pushed through the controversial deal with IAI, which is already under investigation by the Central Bureau of Investigation (CBI) in the Barak missile scam of 2000. Despite initial vigilance worries, vague legal opinion and negative consequences for the indigenously-produced missiles in the same class, the government went ahead with the deal and asked IAI to keep quiet about it for a while.
DNA’s disclosures forced the deal out in the open. The key arms dealers involved are said to be Sudhir Choudhary and his associates, on behalf of IAI. Suresh Nanda, son of a former navy chief, was deployed on behalf of Rafael, which will end up getting over Rs3,000 crore in the deal. Both Choudhary and Nanda were named in the CBI’s FIR filed in 2006 in the Barak scandal.
Deal to help revive Israel firm
The key arms dealers involved in the Rs10,000 crore MRSAM deal with Israel Aerospace Industries are said to be Sudhir Choudhary and his associates, on behalf of IAI. Suresh Nanda, son of a former navy chief, was deployed on behalf of Rafael.
Sudhir and his brother Susheel are the most powerful arms dealers in India today, with extensive networks across Russia, Israel and Europe. They also enjoy great proximity to a Union minister. Suresh Nanda is the son of Admiral SM Nanda, who was the navy chief during the 1971 war, and is said to be involved in several arms deals.
According to two different sources in the arms industry, the total commission for the arms agents could be as high as 9%. If one were to assume that the 6% business charges are substantially about commissions, the actual payment would be in the range of Rs 900 crore at 9%. IAI and Rafael have a contract to share work amongst them. Rafael would be making the Barak VIII missile for the MRSAM system, dependable sources said.
Besides the two powerful Indian arms agents, the Israelis had also fielded Elul group, which has been very active in India for the Israeli arms companies. Officially, Elul Asia acknowledges a marketing tie-up with Rafael and receipt of millions of dollars for their services in India. Meaning, they have been paid crores of rupees for getting Rafael defence deals from India, despite India’s laws banning middlemen. According to DNA queries, Elul group and its chief, controversial arms dealer David Kolitz, have also been active on the deal.
Israeli sources admit that the deal will help IAI, which is currently in deep financial trouble. This will be the single biggest boost in recent memory for the beleaguered firm.
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