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 the Indian 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 from India 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]

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 has been 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-year Interpol 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]

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 the ouster 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.

The future and the legal course of the case is now a foregone conclusion. Chronology of a case that crumbled Mar 24, 1986: The Rs 1437 crore deal between Indian Government and Swedish arms manufacturer A B Bofors for supply of 400 howitzer field guns of 155mm to Indian army. Apr 16, 1987: Swedish radio claims Bofors paid kickbacks to top Indian politicians and defence officials. Apr 20, 1987: PM Rajiv Gandhi assures Lok Sabha that neither any middleman was involved in the deal nor any kickback was paid. Aug 06, 1987: Joint Parliamentary Committee set up under B Shankaranand to probe charges of kickbacks. April 25, 1988: jpc submits its report. Jul 18, 1989: JPC report presented in Parliament. Jan 22, 1990: cbi registers fir in the case. Dec 1992: Supreme Court reverses a Delhi High Court order quashing the FIR in the case. Jan 21, 1997: Secret documents running into over 500 pages given to indian authorities. Feb 12, 1997: letters rogatory issued to Malaysia and UAE seeking arrest and extradition of Italian businessman Ottavio Quattrocchi and former Bofors agent win chadha. May 1998: Delhi HC rejects Quattrocchi's plea for quashing of red corner notice notice issued by Interpol at the behest of CBI. Oct 22, 1999: CBI files first chargesheet naming Win Chaddha, Quattrocchi, former defence secretary S K Bhatnagar, former Bofors chief Martin Ardbo and the company AB Bofors.

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

Key players in Bofors scandal

Headlines Today
New 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 The Indian 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

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 had paid 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.

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

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.

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 scandal

Published: Tuesday, Feb 27, 2007

NEW DELHI: The Bofors gun deal, signed between the Indian government and the now defunct Swedish arms company AB Bofors 21 years ago, has once again come to haunt the government and 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 subsequently released 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 arms company AB Bofors signed for supply of over 400 155mm howitzers.

April 16, 1987: Swedish Radio claims Bofors paid kickbacks to top Indian politicians and key defence officials to secure the deal. April 20, 1987: Then Indian prime minister Rajiv Gandhi assures the Lok Sabha that neither was any middleman involved in the deal nor were kickbacks paid. August 6, 1987: Joint Parliamentary Committee (JPC) set up under B. Shankaranand to probe into allegations of kickbacks. February 1988: Indian investigators visit Sweden. July 18, 1989: JPC report presented to parliament. November 1989: Rajiv Gandhi loses power as Congress defeated in general elections. December 26, 1989: Then prime minister V.P. Singh's government bars Bofors from entering into any defence contract with India. January 22, 1990: Central Bureau of Investigation (CBI) registers complaint in the case. January 26, 1990: Swiss authorities freeze bank accounts of Svenska and AE Services, who allegedly received unauthorised commissions for the deal. February 17, 1992: Journalist Bo Anderson's sensational report on the Bofors payoffs case published. December 1992: Supreme Court reverses a Delhi High Court decision quashing the complaint in the case. February 9, 1993: Supreme Court rejects former Bofors agent Win Chadha's plea for quashing the letters rogatory sent by the trial court to its counterpart in Sweden seeking assistance in the case. July 12, 1993: Swiss federal court rules that India was entitled to Swiss bank documents pertaining to the kickbacks. July 29/30 1993: Italian businessman Ottavio Quattrocchi, who was representing Italian fertiliser firm Snam Progetti for several years, leaves India to avoid arrest warrant the CBI was seeking. January 21, 1997: After four years of legal wrangles, secret documents running into over 500 pages given to Indian authorities at a public ceremony in Berne. January 30, 1997: CBI constitutes special investigation team for the case. February 10, 1997: CBI questions ex-army chief General Krishnaswamy Sundarji.

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' notice issued by Interpol at the request of CBI. October 22, 1999: CBI files first chargesheet naming Win Chadha, Quattrocchi, former Indian defence 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 was killed in 1991. November 7, 1999: Trial court issues arrest warrants against Quattrocchi, while summoning other four accused. December 13, 1999: CBI team goes to Malaysia to seek extradition of Quattrocchi; fails in its efforts. Early 2000: Quattrocchi approaches the Supreme Court for quashing of arrest warrant against him. Court asks him to appear before CBI for interrogation while protecting him from being arrested. 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 from Bofors had no connection with the gun deal. 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 the country. 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 India's request for Quattrocchi's extradition.

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's bank details. February 4, 2004: Delhi High Court clears Rajiv Gandhi of involvement in the Bofors kickbacks 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 able to 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 $1 million 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 and tells 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

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 also weaken 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 the CBI and the court will proceed with the 12-year- old case.

Rajiv Gandhi cleared over bribery

An Indian court has cleared ex-prime minister Rajiv Gandhi of any wrongdoing in a highprofile arms deal case. But Delhi's High Court ruled that the three billionaire Hinduja brothers should be tried for conspiracy to cheat the government, a charge they deny.

Rajiv Gandhi was assassinated while campaigning in 1991

Prosecutors say Swedish firm AB Bofors paid them illegally in the $1.3bn sale of 400 howitzers to India in 1986. The Bofors scandal was a key issue in Gandhi's 1989 election defeat. He was assassinated while campaigning in 1991. High Court judge JD Kapoor said there was no evidence of involvement in the deal by Gandhi or the late former defence secretary SK
After 17 years of abuse and vilification, it's a special moment today for me and my children, Rahul and Priyanka Sonia Gandhi

Bhatnagar. "Sixteen long years of investigation by the [Central Bureau of Investigation] could not unearth evidence against them for accepting bribes", he said. Gandhi's widow, Sonia, who is now the leader of the main opposition Congress party, was delighted with the verdict. "My husband always said that one day his innocence would be proved. I hope the people who caused him so much pain will now rethink the falsehoods they spread about him." Trial date set Britons Srichand and Gopichand Hinduja and Swiss citizen Prakash Hinduja deny any wrongdoing. The brothers head a global business empire in a number of sectors including banking, transportation and pharmaceuticals. The judge cleared the Hindujas of conspiring with Gandhi and other public servants to cheat the Indian Government. But they will face trial for entering into a criminal conspiracy to cheat the government. Prosecutors say they received millions of dollars in commission from Bofors, now known as Kartongen Kemi Och Forvaltning AB, for the deal. Commissions on defence deals are illegal in India. Ram Jethmalani, who has defended the Hindujas, has said the money paid by Bofors was part of a long-time consultancy agreement.
The Hindujas were cleared of conspiring with the government

He told the Times of India the brothers "played no part whatsoever in the securing of the gun contract by Bofors". The brothers had challenged a lower court's trial order in 2002 on the grounds that there was no material record to prove their involvement. The judge said a magistrate was empowered to hear the cheating and conspiracy charges and set a trial date of 23

February. The BBC's Ayanjit Sen in Delhi says the Bofors case has dogged 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 Ottavio Quattrocchi and former Bofors chief Martin Ardbo. Chadha has since died, while prosecutors have failed to obtain the presence in court of Mr Ardbo or Mr Quattrocchi.

THE BOFORS CASE

The end of the case

V. VENKATESAN in 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 the Hinduja Brothers and the Bofors company.

The three Hinduja brothers at the Tis Hazari courts in New Delhi in January 2001 after they 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 a mataphor for political corruption at the top. It helped to mobilise public opinion against corruption in a way previous scandals had failed to do, and this, to a great extent, was instrumental in bringing down the Rajiv Gandhi government in the 1989 general elections, as

there was a perception that he had presided over a massive cover-up operation to conceal the pay-off and its beneficiaries. Since then, the investigation and trial of the case has taken several twists and turns, depending on the 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 by the prosecution, the premier investigative agency, the Central Bureau of Investigation (CBI), to correct some minor defects in documenting the case. The Delhi High Court's May 31 judgment putting the case to rest is inexplicable. The origin of the case can be traced to a contract entered into between the Government of India and 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 of Rs.1,437.72 crores, On May 2, 1986, advance payment equivalent to 20 per cent of the contract value was made to the Bofors company by the government. This amounted to more than $50 million, 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 obtain the 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 the contract 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 it absolutely clear that the payoffs made by Bofors were directly contingent on winning the contract. The payoffs were in direct and flagrant violation of assurances repeatedly given by Bofors to the Indian government to the effect that it had no agents or representatives in India for the howitzer deal. The CBI submitted its charge-sheet in the case on October 22, 1999, naming as accused former Defence Secretary S.K. Bhatnagar, former Bofors agent W.N. "Win" Chadha, Italian businessman Ottavio Quattrochhi, President of Bofors company at the time of signing the contract Martin Ardbo, and A.B. Bofors, Sweden, the private company. In pursuance of the Letters Rogatory (a request application to a foreign court seeking information or evidence from persons within the jurisdiction of that court) issued by the Special Judge, the Swiss government handed over a set of documents comprising 71 pages to the CBI on December 18, 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 Rajiv Gandhi as accused. Rajiv Gandhi's name was included as he, along with Bhatnagar, was allegedly complicit in the abuse 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 been prosecuted, as he was dead at the time of filing of the charge-sheet.

SHANKER CHAKRAVARTY

Per Ove Morberg (left), president of A.B. Bofors, and Lars Gothlin, chief jurist 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 cases against the Hinduja brothers and Quattrochhi, therefore, are important as they were the alleged conduits for the bribe. The supplementary charge-sheet revealed that Bofors transferred funds to the accounts opened by the Hindujas and that the Hindujas had opposed the handing over of documents by the Swiss government to the agencies of the Indian government. In November 2002, Special Judge Prem Kumar found that Rajiv Gandhi's conduct after the whistle was blown on the Bofors payoffs suggested that he was engaged in a "masssive cover-up operation". Prem Kumar also dismissed the plea of the Hinduja brothers seeking discharge. He held that the evidence offered strong prima facie grounds for proceeding with the prosecution of the Hindujas, under the Prevention of Corruption Act (PCA). The Hindujas appealed against this judgment in the Delhi High Court. In February 2004, Justice J.D. Kapoor of the Delhi High Court offered them a partial relief of discharge under the PCA, but held them liable for prosecution on a number of other charges such as cheating and conspiracy to cause wrongful loss to the government. He indicted the Bofors company 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 negotiations for 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 Court on May 31 quashing the proceedings against the accused for the remaining offences in the trial court has raised a political storm and shaken judicial conscience. Observers are surprised that Justice Sodhi has cast aspersions on the nature of the investigation and the trial. In paragraph 3 of his judgment, Justice Sodhi wrote that the CBI, without waiting

for the receipt of further documents from the Swiss authorities, filed a second charge-sheet on October 9, 2000, implicating the Hindujas. In Paragraph 66, he wrote: "Before parting, I must express my disapproval at the investigation that went on for 14 years and I was given to understand 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 - both political and professional - were ruined, besides causing huge economic loss. Many an accused lived and died with a stigma. It is hoped that this elite Investigating Agency will be more responsible in future." There is no mention of the source of the information regarding the cost of investigation of Rs.250 crores. There were two sets of documents requested by the Indian government through the Letters Rogatory 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 of payment of commissions by Bofors from bank accounts in Sweden to coded bank accounts in Switzerland. They were obtained through judicial process, with the Switzerland Supreme Court clearing the transfer of documents, mainly bank papers, waiving their strict secrecy laws, as the documents were sufficient under the Swiss legal system to launch a prosecution for the offence of bribery. The documents from Sweden are relevant in throwing light on the contracts between Bofors and their agents. These were mainly procured by The Hindu's investigation between April 1988 and October 1989. It is the authenticity of these documents pertaining to the Hindujas that Justice Sodhi has called into question. The issue before the court was whether Bofors made a representation to the Government of India that there were no agents involved in the negotiations for the contract with the knowledge of the Hindujas, and therefore, a prima facie case of conspiracy could be made against them. Justice Kapoor, in his February 2004 judgment, held that as the Hindujas had been working as agents of Bofors since 1979, their contention that they were not aware of the representation of Bofors was unconvincing. Justice Kapoor, in order to sustain this finding, relied on certain documents (contained in Volume 22 submitted by the Prosecution). In the trial court, it was discovered that these documents were photocopies of some originals that no one had seen. The documents were supplied to the CBI by the Editor of The Hindu, who did not disclose his sources. Justice Sodhi said: "The Editor of The Hindu is not a person who can testify that the documents given by him are true copies of some original documents." Justice Sodhi then referred to the statement made by the prosecution in the trial court - "that the relevant and material documents are not available in original and no copies duly authenticated in accordance with the Indian Evidence Act are available".

Justice Sodhi then concluded: "If these documents are not proved by satisfactory secondary evidence and will not be ever proved at the trial, it will be a cruel joke on the accused to expose them to a long and arduous trial and waste public time and money which will be totally out of proportion 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 Justice in Sweden for these documents. When The Hindu published these documents in June 1988, they were analysed and photographed and given to the Swedish Prosecutor with a request to confirm their authenticity. Lars Ringberg, then Chief District Prosecutor, told the CBI that he would compare those documents with the original and let it know. Subsequently, he informed the CBI through Interpol that he had checked the documents and they were the same as the documents in the Swedish files. All this was done before the First Information Report was lodged in the case in 1990. The relevant correspondence and documents were submitted to the court. The CBI claimed that documents numbering 652 in Volume 22 were forwarded to India by Sweden in response to India's Letter Rogatory in 1998. Justice Kapoor had directed the trial court to consider the admissibility of the documents at the appropriate stage, and the CBI submitted that the appropriate stage was only after the charge was framed and the evidence came to be recorded. Justice Sodhi, however, refuted both these contentions. The CBI relied upon a joint statement dated February 22, 2005, from Sten Lindstrom and Thomas 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 to the 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 original documents 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 the photocopies provided by the Prosecutor's office that have reached India but the only change that has taken place during the course of transmission is that an initial and seal of the Ministry of Justice has been put thereon but no date. Under the Evidence Act, I cannot take judicial notice either of the seal or of the initial... . Moreover, what becomes crystal clear is that the Ministry of Justice has not issued any certified copy of documents in their possession. There is no such certificate appended to photocopies nor is there anything to show that the authority which has put its seal and initials had the originals in its possession and made the photo copies therefrom."

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 the time of framing charges, could decide whether the material collected during the investigation could be converted into admissible evidence at the ensuing trial. The CBI's reaction appeared strange. Having secured just two weeks from Justice Sodhi to rectify the defects pointed out, the CBI returned to the court pleading helplessness. "If the CBI is incapable 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 the Bofors gun contract, and created doubts about their veracity, as some words were in the handwriting of somebody. "Unless the person who wrote those words is identified and it is proved that his position is such that his writing those words proves the truth of the contents, the documents are utterly useless. Based on this dubious material, to allow a prosecution to go on for many 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 such a useless prosecution. It was for this reason, I thought of giving the CBI an opportunity to bring the 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 not its agents. Justice Kapoor had directed the trial court to prosecute the Bofors company for forgery on the assumption that the originals of the forged documents would be made available and produced as and when called for by the trial court. However, following the admission by the CBI that it did not have the originals, Justice Sodhi quashed the trial court's order framing forgery charges against the Bofors company.

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 history books. 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. Asked whether this included former Prime Minister V.P. Singh, former Opposition leaders now in the party 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 never made any allegations against Rajiv Gandhi on the Bofors issue. He recalled that his government did not name him [Rajiv Gandhi] in the FIR filed in 1990. V.P. Singh claimed that though he had campaigned on the Bofors issue and become Prime Minister after the 1989 elections, he had never 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 through appropriate legal processes. "It is surprising that after such a long investigation, such infirmities and elementary errors existed in preparing the case," the party's Polit Bureau said. The party lamented that neither the CBI nor the judicial process in the country had been able to produce a verdict in any high-level corruption case. This had led to the people feeling that the system was incapable of bringing to book those who misused public funds, it added. Bharatiya Janata Party general secretary and spokesperson Arun Jaitley alleged that there was a clear collusion between the CBI and the accused in the case as was evident from the collapse of the 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 the accused and the political masters who ran the Central government, he said. He feared that the CBI would obviously decide to let the erroneous judgments stand. But the lingering question remained unanswered by the BJP: Why did the National Democratic Alliance government, which was in power until May 2004, not appeal against the Delhi High Court's February 2004 verdict quashing bribery charges against the Hindujas? The CBI's failure to file a special leave petition meant that it became the basis of the recent Sodhi judgment by default. 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.

During a brief hearing before Chief Metropolitan Magistrate Kaveri Baweja, Additional Solicitor General P P 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 against Quattrocchi. "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.

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 newspaper Dagens 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-offs under the chairmanship of B. Shankaranand. September 1987: 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 of Panama, Moresco of Switzerland and AE Services of the UK-which had received "winding up cost".

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.

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. October 1996: 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. November 26, 1996: Appeals rejected. January 21, 1997: Joginder Singh, specially appointed CBI director by Deve Gowda, goes to Berne to receive secret bank documents. February 20, 1997: The CBI team returns to India from Malaysia after failing to secure Quattrocchi's arrest. October 22, 1999: Finally, with the BJP in power, the CBI files the chargesheet in the case. It names former prime minister Late Rajiv Gandhi, former union 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. October 9, 2000: CBI files chargesheet against the Hindujas, their share said to be routed through McIntyre Corp December 19, 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).

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 former PM 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' December 9, 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 offender under 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

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 KP Pathak 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."

"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."] October 2005: 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." October 22, 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. November 16, 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. November 26, 2005: Department of Personnel 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 of Prosecution, 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")

November 28, 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. December 20, 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). December 22, 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." December 27, 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? Most likely it was on January 11 itself, and still needs to be cross-checked) A top CBI official tells the Indian Express: "While we knew we do not have clinching evidence to link the Bofors pay-offs to the frozen funds, we were taken aback at how quickly the defreezing order was passed." When asked, law minister Bhardwaj is brazen: "The Crown Prosecution had sought the status of the investigation and we have conveyed to them the recent rulings of the High Court rejecting the case against the Hinduja brothers. The CBI has failed to establish any link between the Bofors pay offs and the money in two British accounts of Quattrocchi. So how can we penalise him? It is wrong to keep someone's money frozen if there is no proof against him ... The Director (Prosecution) of CBI had said there was no case for going into appeal [against the Hinduja judgement] and the Additional Solicitor General had agreed with this."

Advocate Ajay Agarwal files a petition in the Supreme Court against the government claim to the CPS that there was no link between the funds in two frozen accounts of Quattrocchi and the Bofors payoff case. The Chief Metropolitan Magistrates court in New Delhi directs the CBI to file a status report by 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 minister Pranab 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 the government and the CBI to maintain "status quo ante" on Q's two London accounts and directs they should ensure no money is withdrawn "if not withdrawn so far". In case of of funds withdrawal, the government and the CBI are asked to explain steps taken in an affidavit, asking them to reply within a week -- fixing the next hearing for January 23. The bench also asks the government to make clear who instructed ASG Dutta to okay defreezing of the accounts. CBIs comes to the aid of a beleaguered law ministry and despite various flip-flops and offthe-record briefings to the media backed by supporting documents about the government pressure, backs the Department of Personnel and Training (DoPT) and the law ministry. Joint director A K Majumdar says it was "purely" the CBIs decision to send Additional Solicitor General B Dutta to London and that "neither ministry had any role to play" in the January 11 order de-freezing Q's two London accounts. The PM finally speaks in Guwahati: "My government has never interfered with the CBI in matters of investigation. A controversy is sought to be created about certain steps taken by the CBI in the matter relating to the freezing of the Quattrocchi bank account. Actions relating to both freezing and unfreezing

these accounts have been taken at the level of the CBI in consultation with law officials as per established procedure. "Neither the freezing was under government order nor has the defreezing been done under government order. These matters are exclusively under the functional jurisdiction into which the 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 in this government at all cost." January 17, 2006:
y

Defence minister Pranab Mukherjee says: "We have no jurisdiction on other countries. We can 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. Sonia Gandhi tells Sitaram Yechury of the CPM that the government had no advance knowledge of the CBI decision to allow defreezing of Ottavio Quattrocchis London bank accounts. 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 the investigation which in any case "should reach a conclusion soon, because in her opinion it had dragged on for too long" Quattrocchi, meanwhile, denies reports from Milan to NDTV that he was in touch with law minister H R Bhardwaj or that the latter's lawyer son had advised him in his extradition case in Malaysia. "This is not correct, not at all correct". On proximity to the Gandhi family, he said, "Well, I am proud to be a friend of the Gandhi family. But please leave the friendship alone." Given the gravity of the matter, in an unprecedented move, the Central Vigilance Commission (CVC) says they have "asked the CBI for a complete factual position on the case" The CVC tells the Indian Express, "There appear to be seeming contradictions in the statements made by the agency a few days ago and in the press conference addressed by a Joint Director. That is why we have asked for the facts of the case.". On the PM's talk of the CBI 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 to government approval through the law ministry again. This compromises the independence of the CBI."

THE BOFORS CASE

Off the hook

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

THE entry on physical description for Ottavio Quattrocchi, wanted by Interpol, New Delhi, for his role in fraud and bribery in the Bofors pay-off case, on the website of the Central 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 his extradition 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 in 1997. 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 agencys connivance at derailing the extradition proceedings against him. Quattrocchi got bail in February itself, but was barred from leaving Argentina until the extradition proceedings finally concluded. On June 8, Judge Mario Harichi Doi of the First Court in El Dorado, Argentina, rejected, on technical grounds, the Indian governments request for extraditing Quattrocchi to India. The Judges objection, according to reports, was that the fresh arrest warrant issued by a Delhi court on February 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 warrant without 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 of that judicial decision which ordered the detention but instead, only the arrest warrant of February 24 had been tagged. Even this warrant the Judge said, did not specify the reasons for detention and for the request of extradition. This was a fundamental requirement for not dismissing the request for extradition, the Judge said. Under Argentine law, the lower courts decision would be challenged automatically before the Supreme Court by the public prosecutor unless the government specifically asked him not to. Only on July 28 the CBI filed a status report in the court of the Chief Metropolitan Magistrate (CMM) in Delhi which is the court where the Bofors case is being heard and Quattrocchi is listed as an absconding accused that an appeal had been filed. The CBIs status report stated: It is further informed that an appeal against the order dated June 8, 2007 of the Federal Court [rejecting the CBIs extradition request] as is mandatory as per Argentine law, has been filed by the Argentine public prosecutor in the Federal Court of El Dorado.

According to reports, Lilian Delgado, the Argentine public prosecutor hired by the government in March to press for Quattrocchis extradition, confirmed on August 15 that the Indian government had decided to withdraw the appeal. Indian Ambassador Pramathesh Rath handed over a formal communication to the Argentinian Foreign Office asking to withdraw the Supreme Court appeal. CBI Director Vijay Shankar was apparently 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 the extradition 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 also challenged the Indian governments role in defreezing Quattrocchis bank accounts in London, 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 was declined because Quattrocchis detention was illegal as it was not supported by a reasoned order of the Indian court and because the non-bailable warrant issued by the CMM, Delhi, on February 24, though supported by an order, was not adequate. Agrawals application has raised disturbing issues concerning the CBIs handling of the case. Citing newspaper reports, he alleged that CBI officials passed on opinions of Law Officers and of its own officials to Quattrocchis counsel to facilitate its own defeat in court. [The] CBI was neither serious nor sincere in its efforts to secure his extradition, Agrawal alleged. An important newspaper report the CBI has so far not rebutted is the one quoting Quattrocchis counsel, Free Land. The Sunday Express of June 10 quoted him as saying that 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 an appeal against the Delhi High Court ruling by Justice R.S. Sodhi dismissing the case against [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 the warrant 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 against the various accused in the Bofors pay-offs case. He held that Quattrocchi could be charged only with conspiracy to cheat. In May 2005, Justice R.S. Sodhi gave a clean chit to the Hinduja brothers.. On February 24, 2007, the CBI obtained a fresh non-bailable warrant of arrest against Quattrocchi 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

by the Court of Special Judge, Delhi, under various provisions of law, including the Prevention of Corruption Act (PCA). In his February 2004 order, Justice Kapoor quashed the charges under the PCA, making it necessary, it would seem, for the CBI to obtain a fresh warrant. But the question why the 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 in Argentina 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 under the old warrant, there was no need to obtain a fresh warrant after Quattrocchis detention 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 from that of the other accused in 2001.
Case in Malaysia

In 2003, the CBI attempted to seek Quattrocchis extradition from Malaysia. The Indian government contested the matter before Malaysian courts. The Sessions Court in Malaysia held that under both Malaysian law and Indian law conspiracy and cheating were two separate offences, but when read together they gave rise to duplicity of offences, 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 the court to determine whether the offence was an extradition offence under Section 6 of the Malaysian Extradition statute. The High Court of Malaysia held that the identification of the corruption offence alleged to have been committed by Quattrocchi was open to doubt. The thrust of the cheating offence against Quattrocchi was the receipt of money by him following the appointment of A.E. Services Limited of the United Kingdom, at his behest, as the consultants of Bofors. The High Court of Malaysia pointed out that paragraph 13 of the charge sheet of the Indian trial court referred to the prohibition on the appointment of agents as the present government did not approve of the appointment of Indian agent[s] acting for foreign 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 cannot therefore be termed or treated as particulars for the offence of cheating from the document made available. Thus, the High Court affirmed the order of discharge passed by the Sessions Court and dismissed the Indian governments application for extradition. Both the Court of Appeal and the Federal Court of Malaysia dismissed the Indian governments appeals. In 2006, the CBI defended before the Supreme Court its decision to defreeze Quattrocchis accounts in London by claiming that there was no evidence to link the

funds in the London accounts with the proceeds received by Quattrocchi allegedly through A.E. Services. Secondly, the CBI claimed there was imminent unlikelihood of securing his presence in India for completing the trial. After the failure of the extradition case in Argentina, Vijay Shankar said the CBI would continue 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 could be an exercise in futility.