A quick peek into the biggest defence scandals that have rocked India.
VVIP CHOPPER SCAM 1999 to 2010
Rs 3,600 crore
The Deal: In August 1999, the Indian Air Force mooted a proposal to replace old Mi-8 used by VIPs, including President, Prime Minister, and subsequently a global Request for Proposals (RFP) was issued in March 2002. However, to avoid a single vendor scenario, Brajesh Mishra, principal secretary to the then Prime Minister Atal Bihari Vajpayee, in November 2003 asked the IAF to amend the operational requirement for fair play in the deal suggesting that Special Protection Group should also be made part of the decision-making process. The decision was finalised during the tenure of George Fernandes as defence minister and Air Chief Marshal S Krishnaswamy as IAF chief. In several meetings between March 2005 and September 2006 changes were incorporated and in-principle approval for procurement of VVIP choppers were accorded during the tenure of Pranab Mukherjee as defence minister and S P Tyagi as chief of Indian Air Force. On September 27, 2006, RFP was issued to six vendors. However, only three vendors—Sikorsky, USA; AgustaWestland, UK; and Rosoboronexport, Russia—responded to the RFP. Field trials carried out in January to February 2008 recommended AgustaWestland for inclusion in the service. On February 8, 2010, the Ministry of Defence (MoD) headed by A K Antony with Air Chief Marshal P V Naik in the IAF office signed the contract with AgustaWestland to procure 12 choppers worth Rs 3,600 crore.
The Scam: 10 per cent kickbacks—approximately Rs 362 crore—paid to middlemen by UK-based Italian company AgustaWestland to swing the deal in favour.
Alleged Middlemen: Guido Ralph Haschke, Christian Michel. Italian investigators allegedly named Former Air Chief S P Tyagi, Sanjeev Tyagi, Sandeep Tyagi, Rajiv Tyagi, and Gautam Khaitan.
The Firm: AgustaWestland Spa, Italy/ UK, a subsidiary of Finmeccanica, Italy.
Probe into Allegation: In February 2012, Italian investigators probing the murky dealings of AgustaWestland’s parent company Finmeccanica alleged that the company was involved in a bribery scandal to secure the deal for 12 VVIP choppers with India. Italian investigators submitted two reports—October 2012 and February 2013—after which the MoD referred the case to the CBI. The Indian agency is looking into the kickbacks paid to Indian agents allegedly named by the Italian investigators in preliminary investigation report submitted to an Italian court.
Status: Preliminary Enquiry filed by the CBI on February 24 to probe the role of Indian middlemen.
TATRA TRUCK SCAM, 2012
Rs 3,000 crore
The Deal: In March 2012, the then Army Chief V K Singh disclosed that he was offered Rs 14 crore bribe to clear a file to purchase 600 Tatra trucks for Indian Army. Subsequently, Defence Minister A K Antony while confirming the allegation told Parliament that the incident happened in 2011 and the Army chief at that point of time did not want to pursue the matter. MoD forwarded the case to the CBI which widened the probe in allegation of highly-priced Tatra trucks purchased by the Indian Army since 1986 when late Rajiv Gandhi was holding the portfolio of MoD and General K Sunderji was army chief. According to government data since 1986, India procured 7,000 trucks from the company at higher price causing huge loss to the government exchequer.
The Scam: Suspicious MoUs/ understanding between Tatra UK and Indian PSU Bharat Earth Movers Limited resulting in higher cost of all-terrain trucks.
Alleged Middlemen: Ravi Rishi, Chairman of the Vectra Group, the largest shareholder of Tatra holdings.
The Firms: Tatra Sipox UK. The third oldest truck manufacturer in the world, Tatra is owned by an international consortium comprising Vectra Ltd, UK; KBC Private Equity, Belgium; Ronald Adams, USA and Meadowhill of Czech Republic.
Probe into Allegation: The case was handed over to the CBI on March 30, 2012. CBI is probing that circuitous route was used to sell the trucks first to Venus projects based in Hong Kong at 35 per cent discount rate which in turn was sold to Tatra Sipox UK owned by businessman Ravi Rishi. The same trucks from the UK were later sold to BEML at an inflated rate.
Status: BEML CMD VRS Natrajan was suspended in June 2012. The CBI filed a status report in August 2012. The case is still under investigation.
BARAK MISSILE SCAM, 2000
Rs 1,150 Crore
The Deal: In October 2000, MoD headed by George Fernandes signed a contract with Israel Aircraft Industries for the purchase of seven Barak systems and ammunition. Admiral Sushil Kumar was the naval chief when the contract was signed.
The Scam: Procurement norms were violated by the government. After CBI filed an FIR in 2006, Fernandes told the CBI that he had pressed for the procurement after the then naval chief Admiral Suresh Kumar sent a strong recommendation. It was alleged that the deal was manipulated and kickbacks to the tune of 3 per cent of total value of the deal was paid to the middlemen.
Alleged Middlemen: Suresh Nanda, R K Jain and officials of MoD
The Firm: Israel Aerospace Industries
Probe into Allegation: After Tehelka exposé in 2001, the NDA government set up a commission which gave a clean chit. However, after UPA came to power in 2004 it rejected the commission’s report and ordered a CBI investigation. Middleman R K Jain was stung in an operation conducted by Tehelka which claimed that bribe was allegedly paid to George Fernandes. Ex-naval officer Suresh Nanda was also named.
Status: Suresh Nanda and R K Jain were arrested by CBI in 2008 but later were let off.
NAVAL WAR ROOM LEAK/SCORPENE SUBMARINE CASE, 2005
Rs 19,000 crore
The Deal: In 2005, India approved six Scorpene diesel submarine with a condition of technology transfer at Rs 19,000 crore with the French company Thales. The deal had approval of the then Defence Minister Pranab Mukherjee and Naval Chief Admiral Arun Prakash.
The Scam: Top secret documents related to India’s future defence preparedness plan were stolen from the Navy war room and were allegedly passed on to London-based defence agent Ravi Shankaran and his business partner Kulbhushan Parashar to give it to Thales to swing the €3-billion deal. It was alleged that approximately `500 crore was paid to the middlemen.
Alleged Middlemen: Ravi Shankaran, Abhishek Verma, Kulbhushan Parashar
The Firm: Thales, France. Thales has been operating in India since 1953. In July 2011, Thales and Dassault Aviation signed a contract for the upgrade of the IAF’s Mirage-2000 fleet.
Probe into Allegation: In December 2005, the navy sacked three officers—Vijendra Rana, Vinod Kumar Jha and Capt. Kashyap Kumar—after conducting an internal enquiry. Subsequently the case was handed over to the CBI in 2006. Shankaran aide Parashar, Abhishek Verma and Rajrani Jaiswal were arrested by the CBI in 2006. Shankaran is still at large.
Status: CBI filed a chargesheet in October 2006. Extradition case of Shankaran is pending in District Magistrate Westminster’s Court, London.
DENEL ARMS SCAM, 2003
Rs 21 crore
The Deal: The then Defence Minister Fernandes approved a deal with South African firm Denel for the purchase of 1,200 bunker buster anti-material rifles and ammunition. Subsequently three contracts were passed by two army chiefs —Gen V P Malik and Gen S Padmanabhan.
The Scam: It was alleged that Rs 1.7 crore was paid as kickback to Varas Associates, a company based in Isle of Man to swing the deal.
Alleged Middlemen: Varas Associates based in Isle of Man.
The Firm: Denel, South Africa. South African government is the sole shareholder of Denel which was incorporated as a private company in 1992.
Probe into Allegation: The MoD had approved a CBI investigation in the case in 2005 after the scandal rattled the establishment. The premier investigation agency registered a case in June 2005. The CBI had alleged that Varas Associates, which was appointed as an agent for Denel in violation of established norms, was paid 12.75 per cent commission in the deal.
Status: CBI was promised evidence by South African government in 2012. However, the agency is yet to get a reply. Investigation is on.
COFFIN SCAM, 1999
Rs 6.5 crore
The Deal: During the Kargil war, the NDA government purchased 500 aluminium caskets and 900 body bags from Buitron and Baiza, a US-based company on the nomination basis for the funeral service of martyrs of Kargil war.
The Scam: It was alleged that the NDA government had paid 13 times higher than the original price for the caskets.
Alleged Middlemen: Victor Baiza, Major General Arun Roye, Colonel S K Malik and Colonel F B Singh
The Firm: Buitron & Baiza, Texas -headquartered funeral service company, is little known in the global market.
Probe into Allegation: The CBI registered a case in June 2006 after the Comptroller and Auditor General in its report indicated the existence of middlemen in the deal. After three years of investigation, the CBI filed a chargesheet on August 19, 2009 indicting three senior Indian Army officers—Major General Arun Roye, Colonel S K Malik and Colonel F B Singh—and a US national, Victor Baiza, in the deal. However, it gave a clean chit to Fernandes who was dubbed as ‘Coffin Chor’ by the Opposition.
Status: Chargesheet filed in August 2009. No conviction
KARGIL ARMS & AMMUNITION SCAM, 1999
Rs 1,762 crore
The Deal: The MoD headed by Fernandes with Gen Malik as army chief approved 25 defence purchase deals during the Kargil War in 1999 to procure arms and ammunition, including thermal imagers, special ammunition for 40 mm L-70 guns, spare for 155 mm guns etc.
The Scam: It was alleged that the purchase were in violation of contract rules and continued even after the Kargil War causing allegedly over Rs 100 crore loss to the government exchequer.
Alleged Middlemen: Not disclosed
The Firms: Many
Probe into Allegation: A number of cases were registered between 2000 and 2004. After six years of investigation, the MoD decided to close 29 cases in May 2010. The CBI also conveyed to the MoD that it found no violation in the deals related to purchase of Hand-Held Thermal Imagers worth Rs 41 crore, ammunition for T-72 tanks worth Rs 402 crore and other ammunition worth Rs 9 crore.
Status: Three cases are still under investigation.
BOFORS SCAM 1986
Rs 6,994 crore
The Deal: On March 24, 1986, a Rs 1,500 -crore defence contract was signed between India and Swedish firm AB Bofors for the supply of 410 field howitzers by the MoD headed by late Rajiv Gandhi with Gen K Sundarji as army chief.
The Scam: It was alleged that Ottavio Quattrocchi, an Italian businessman close to Rajiv, was allegedly paid 3 per cent (`64 crore) of the total contract as commission to secure the deal. The scandal led to the defeat of the Congress government in 1989 General Election. In April 1987, Swedish Radio broke the scandal. Subsequently in August 1987, Bofors admitted kickbacks were paid to swing the deal.
Alleged Middlemen: Quattrocchi, Win Chadha, S K Bhatnagar (the then defence secretary), others.
The Firm: A B Bofors, Sweden. The parent company of Bofors was acquired by SAAB Group in 1999. SAAB is actively working in India and has signed several joint ventures with private and government companies.
Probe into Allegation: A JPC was formed in 1987 which gave a clean chit to the government, saying there was no foul play. V P Singh, who was sworn in as prime minister, ordered a CBI inquiry which had listed 18 alleged beneficiaries of the deal in the preliminary investigation. The investigation dragged on for almost 23 years.
Status: Closure report filed in March 2011. No conviction.
HDW SUBMARINE SCANDAL, 1981
Rs 420 crore
The Deal: On December 11, 1981, the MoD headed by late Indira Gandhi signed an agreement with HDW for two 209-class submarines manufactured in Germany and two other assembled at Mazagaon docks in Mumbai through transfer of technology. Admiral Ronald Lynsdale Pereira was naval chief when the contract was signed by India. HDW was selected over two other firms, Kockums of Sweden and Sauro of Italy.
The Scam: It was alleged that HDW paid Rs 28 crore to an Indian agent as commission to swing the deal. The scandal broke out after the Indian Mission in Bonn wrote to the government confirming involvement of an Indian middleman.
Alleged Middlemen: Not disclosed.
The Firm: HDW, Germany. HDW was blacklisted by India in 1991. However, to upgrade and repair the four submarines purchased in 1987, Indian Navy urged government to lift the ban. Subsequently, in April 2011, the upgrade proposal was approved by the government, which included replacement of the weapon control system, data link system, torpedoes and missiles. Probe into Allegation: CBI registered a case in March 1990 alleging that the kickback was routed through Swiss banks, including the Bank of Credit Suisse in Geneva. The CBI in its FIR filed in March 1990 had named former vice chief of naval staff Vice Admiral Schunker, former defence secretary S K Bhatnagar and former navy Captain M Kondath as accused in the case.
Status: Closure report filed in March 2003. No conviction
via The New Indian Express.