HVK Archives: Making sense of Bofors
Making sense of Bofors - Sunday
Vir Sanghvi
()
2-8 February 1997
Title : Making sense of Bofors
Author : Vir Sanghvi
Publication : Sunday
Date : February 2-8, 1997
Who took the Bofors money?
We still don't know. That is to say, we now have the names of one
set of beneficiaries but we don't know who the payments were
finally intended for, or even what the beneficiaries did in return
for the money.
However, the documents handed over by the Swiss authorities to the
CBI are expected to name Win Chadha and Ottavio Quattrocchi as the
beneficiaries of the account in which Bofors paid millions of
dollars.
Who is win Chadha and why did he get so many millions from Bofors?
This probably the only question to which there is a simple answer.
Win Chadha is your classic Punjabi arms dealer, complete with a
farmhouse in the Delhi suburbs and a charge-account at the Bukhara.
His Anatronic Corporation was the official agent for Bofors and Win
fixed hotel bookings and generals for the Bofors Corporation.
All arms dealers take part of the commission abroad and Win was no
exception. Bofors had a second agreement with Svenska, a shell
company owned by Win and registered in Panama, whereby the hard
currency commission would be paid directly into Svenska's Swiss
account.
This was no secret. When Bofors finally secured the contract after
stiff opposition, Win threw a party at the Maurya to celebrate.
Modestly, he festooned the banquet hall with placards and banners
reading 'Win Wins Again'.
Only after the deal became a scandal, did Win change his mind. He
was never the Bofors agent he claimed. He was merely a
'consultant'. What about the party then?
It was a birthday part claimed Win. But it wasn't his birthday,
the sceptics pointed out. So what, retorted Win, this is a free
country you can throw birthday parties whenever you like.
Was Svenska the only agent?
This is where it starts getting complicated. Anatronic was the
only official agent - later changed to consultant - but everybody
knew that Win's job consisted of wining and dining joint
secretaries and assorted military men. The real agent - who dealt
with the politicians - had to be somebody else.
Prime suspects were always the Hindujas, four Sindhi brothers who
are said to be the richest non-resident Indians in the world. V.P.
Singh had noted on the HDW submarine file (when he was defence
minister) that the Hindujas were agents on that deal so it seemed
logical to blame them for Bofors which was the next scandal.
The Hindujas have always denied being arms dealers. But fewer and
fewer people seem to believe this. The problems started when Bofors
told the JPC investigating the scandal that one of its
agents/consultants was a company called Pitco. Bofors said that
Pitco had been its agent since the Morarji Desai era.
Chitra Subramaniam, then of The Hindu, promptly produced payment
sheets from Bofors to Pitco 'care of G.P. Hinduja, new Zealand
House, Haymarket London.
Could the Hindujas still deny that they were connected to Pitco and
therefore to the Bofors deal?
Yes, they could. And they did.
The documents were forgeries, they said. And to this day they
persist with the denials.
Was there a third agent?
That is the key to the entire Bofors scandal. Long after Pitco and
Svenska had signed up, and two months before Bofors got the
contract, it hired a third agent.
What makes this more significant is that the chairman of Bofors had
been summoned by the defence ministry and told to sack any agents
involved in the deal. Despite this, Bofors hired a new agent a
month later.
Bofors has never explained why it did so. The Bofors executives who
deposed before the JPC admitted that a third agent had been hired.
But when they were asked why they did this, they retorted that
they had 'forgotten' that the defence ministry had told them to
sack agents.
The third agent is the most elusive. The company is called A.E.
Services, and is not registered in Panama or some other tax haven.
Bofors told the JPC that it was a company promoted by a retired
British serviceman called Major R.A. 'Bob' Wilson and provided an
address in Guildford, Surrey. The implication was that this was a
legitimate defence consultant and not some shell company. The JPC
bought this line.
But it was a lie. In 1988, SUNDAY traced the so-called registered
office of A.E. Services in Guildford. There was no office at all.
It was a solicitor's firm where A.E. Services owned a letter box.
We traced the company's history through the British Registrar of
Companies and discovered that it was a shell company with a paid-up
capital of 1 00 pounds. It had no offices and no employees. Bob
Wilson owned one share (worth one pound) and was no more than a
front man. He knew nothing about India or about the Bofors gun.
A.E. Services did nothing for the deal. Our investigations
revealed that the other 99 shares (apart from the one owned by
Wilson) were owned by another shell company. And this one was
registered in Liechtenstein, where there are impressive secrecy
laws. But even A.E. Services' owner, a company called CIAOU had no
offices and its address was that of Karlheinz Ritter, a lawyer who
specialises in serving as a trustee in shell companies.
The implication was obvious: A.E. Services was the front for the
kickback.
But who owns A.E. Services?
We will probably never know. Secrecy laws prevent us from
penetrating the ownership of CIAOU. So, the only way of tracing
the ultimate ownership is to examine its bank account and check who
is authorised to make withdrawals.
But even this poses problems. Whoever set up A.E. Services knew
what he was doing. The account does not list a beneficiary. It
was set up before the Swiss required anybody opening an account to
submit a xerox of his passport.
All we have is Bob Wilson's statement to the JPC: "No Indian
individual or Indian legal entity received any payments whatsoever
from the compensation figure."
But we do know - from Wilson himself - that the owner was an
individual. Bofors head Martin Ardbo, his lawyer Bertil Sodermark
and Wilson met in October 1987 to decide what to tell the JPC. A
copy of the minutes of this meeting was discovered by Chitra
Subramaniam.
The minutes state, "R.A. Wilson explained that in no circumstances
could he be made to reveal the name of the owner of CIAOU."
The name. The owner. Obviously one man who was not an Indian was
the ultimate owner of A.E. Services.
Who was this man?
We can't tell for certain. But we do know that all the money was
emptied out of the A.E. Services account at Nordfinanz Bank in
Zurich and transferred to another account. When the V.P. Singh
government sent a letter rogatory asking the Swiss to freeze the
A.E. Services account, they froze the second account as well. They
also offered to hand over documents pertaining to this account.
Unfortunately, for the beneficiary of this account, it was set up
after the Swiss insisted on knowing the name of the ultimate
beneficiary of each account. Therefore, we may not know who owned
A.E. Services, but we do know who got the money.
Until the CBI makes public the name of the beneficiary -now that
papers pertaining to his account have been handed over by the Swiss
- we can only go by the available evidence.
The Swiss revealed that three sets of people had filed appeals
against the opening of the accounts. Two were predictable: Chadha
and the Hindujas. But it was the third that caused the most
surprise: Ottavio Quattrocchi.
There was more. Chitra Subramaniam -generally the most reliable
source on Bofors matters - suggested that, the A.E. Services money
had gone into the account of a Panamanian company called Tradimex.
Quattrocchi was listed as a beneficiary of this account. It all
fit. A single individual who was not an Indian, in Major Wilson's
words.
Three years ago, when Subramaniam printed her Story, SUNDAY
interviewed Quattrocchi. It proved to be the only interview he has
ever given on the subject. Of course, he denied everything and
said he was being framed.
But then, he did a very strange thing. He declared that he was
going abroad on a holiday and hurriedly left India - a country he
has lived in since the 1950s.
He has never come back.
What are the political implications?
The subtext of the whole Bofors controversy was that Rajiv Gandhi
had taken the money. Rajiv denied this. And even if Quattrocchi is
officially named as the beneficiary of the A.E. Services account,
this does not prove that Rajiv got the money.
But it would be foolish to deny that any revelation involving
Quattrocchi will hurt Sonia Gandhi and tarnish Rajiv's memory.
Even if you disregard the suggestion which has already been made by
the family's enemies that Quattrocchi took the money on Rajiv's
behalf, enormous potential for embarrassment.
Why would a Swadeshi armament firm pay the Delhi representative of
a state-owned Italian construction multinational called
Snamprogetti a commission on an arms deal? What could Quattrocchi
have done for them in return?
The only explanation possible is this: he was hired because of his
friendship with the Gandhis. This is not to say that he influenced
Rajiv himself but that his proximity to Rave Course Road made him
seem so important that ministers, civil servants and generals bent
over backwards to accommodate him.
Even this limited proposition damages the Gandhis. It suggests that
they were indiscriminate in their choice of friends and paints a
picture of a society in which cronies of the ruling family traded
on personal relationships.
No doubt much will also be made of the coincidence that Quattrocchi
and Sonia Gandhi are both Italians.
Probably not. There will be some sound and fury to begin with but
it should die down. Rajiv Gandhi is dead. And Indians don't like
speaking ill of the dead.
Moreover, Bofors was a long time ago. The agents have delayed the
transfer of documents for seven years by filing appeal after appeal
- the Pitco documents are still the subject of an appeal and have
yet to be handed over - that most people don't even remember what
happened.
And finally, in an era of telecom seams and security scandals,
Bofors seems like small potatoes. The total amount involved (for
all three agents) was Rs 64 crore, roughly equal to the kind of
commission made on a weekly basis in the Narasimha Rao era. And
Quattrocchi got only a third of that amount.
All things considered the Bofors papers will do the Gandhi family
no lasting damage despite Quattrocchi's involvement. Ironically,
the Gandhis will benefit from the hype spread by their enemies that
the account was in Rajiv's name. Now that this has been shown to be
false, Quattrocchi's involvement seems like a relative anticlimax.
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