Revision as of 11:00, 12 February 2017

The scandal of 1987

India Today, December 29, 2008

Gunjeet K. Sra

The Bofors scandal, 1987-1996: One of the biggest political scams in the country till date, involving Rs 64 crore. It was responsible for Rajiv Gandhi’s defeat in the November 1989 general elections.

Why Sweden stopped the Bofors probe

`Sweden stopped probe to save Rajiv blushes’, Jan 26, 2017 The Times of India

Declassified CIA Papers Resurrect Bofors Ghost

Resurrecting the Bofors ghost, a recently declassified CIA report said Sweden stopped investigations into alleged bribery in the howitzer deal in 1988 to spare former PM Rajiv Gandhi from embarrassment.This happened after Rajiv visited Stockholm that year.That payoff scandal had cost him his government.

The CIA in its secret 1988 report, titled `Sweden's Bofors Arms Scandal' said Stockholm had “called off the investigation of Bofors' bribery , probably in an effort to prevent future revelations of bribes to Indian officials that could embarrass PM Gandhi“.

“Following the national audit, Swedish police launched a separate investigation into Bofors bribery , which would have been illegal if payments were made to foreign officials. This investigation was terminated in late January 1988, following a trip by Indian PM Gandhi to Stockholm,“ the report said. “Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance,“ it added. The report listed the vari ous allegations against Bofors, saying the company allegedly bribed Indian middlemen and officials in connection with New Delhi's purchase of 155mm howitzers. The agency concluded the payments had indeed been made by Bofors officials -“either straight to Indian officials, or to middlemen who in turn paid off officials -to secure the $1.2 billion sale of howitzers“.

“Word of the payoffs leaked, sparking domestic difficulties for Indian PM Rajiv Gandhi. Stockholm wanted to save Gandhi the troubles caused him by the Swedish leak, and Nobel Industries wanted to avoid a bribery indictment.The two sides cooperated, therefore, on a scheme to keep details of the payment secret.Stockholm eventually called off the entire bribery investigation,“ the CIA report said. In addition, the report said other incidents may be related to the Bofors scandal. War material inspector Carl Algernon, the customs official responsible for monitoring arms exports, died after being struck by a subway train in January 1987. He had just met (30 minutes earlier) with Anders Carlberg, head of Bofors' parent company Nobel Industries. Algernon was a friend of Bofors directors Claes-Erik Winberg and Martin Ardbo.

The report said the police suspected suicide but murder was a possibility . Media speculation later said Algernon was killed because he threatened to expose the illegal activities of Swedish arms manufacturers. In 1987, media speculated that then PM Olof Palme was assassinated by an Iranian in retaliation to his alleged suspension of an arms shipment to Tehran.

2016: India gives Bofors a second chance

Rajat Pandit, Bofors ghost finally buried, 155mm howitzers coming, Nov 17 2016 : The Times of India

Army Will Start Induction From Mid-2017, Deal Worth $737m

The Bofors jinx has finally been broken after 30 years. After the infamous Bofors scandal of the mid-1980s torpedoed all its artillery modernisation plans, the Army will begin inducting its first modern 155mm howitzers from mid-2017 onwards.

Defence ministry sources said in Nov 2016 that the cabinet committee on security , chaired by PM Narendra Modi, has cleared the acquisition of 145 M-777 ultra-light howitzers from the US in a government-to-government deal worth $737 million (almost Rs 5,000 crore).

The M-777 deal, which has a 30% offset clause, will now be inked within the next two to three weeks. “The Pentagon's letter of offer and acceptance (LoA) to India is valid till November 20, but it can be extended for another 10-15 days,“ said a source. TOI had earlier reported that the LoA for the M-777 deal, which the two governments have been negotiating since 2009-2010, had expired once again on November 7.There was a scramble by the two sides after that to extend the LoA's validity.

Interestingly, the M-777 howitzers are manufactured by BAE Systems, which now owns the original Swedish Bofors company .

Of the 145 M-777 howitzers, 120 will be “assembled, integrated and tested“ in India with BAE Systems selecting Mahindra as its business partner here. The first two howitzers will be delivered within six months of the contract being inked, with the others to follow at the rate of two per month.