The Rs. 64 crore Bofors scandal was the biggest corruption scandal to hit the Indian government in the 1980s. Though there have been far bigger financial scandals and scams after it, Bofors, at least in the public eye, started the era of high-level corruption scandals in India.
In a significant judgment on 4 February 2004, the Delhi High Court quashed the charges against the late prime minister, Rajiv Gandhi, in the case. The following year, the same court quashed all charges against the Hinduja brothers as well as Swedish arms manufacturer AB Bofors, citing absence of original documents.
It all started in the mid-1980s when the Indian government decided to buy the bigger calibre 155 mm howitzers to shore up the country’s defence. The Haubits FH-77 gun, manufactured by Swedish firm AB Bofors, was selected. In March 1986 a deal was signed between India and AB Bofors for supplying the Indian army with 410 155-mm howitzers, with an option of licence-producing more guns.
In April 1987, after a claim was made in a Swedish Radio broadcast about kickbacks allegedly paid to senior Indian government officials, the allegations were quickly denied by the Indian government.
But this was only the beginning of the Bofors scandal.
Chitra Subramaniam Duella, the Indian journalist who broke the scandal, wrote in the Outlook magazine in May 2012: “The problem was the bribes, especially the ones made secretly, were unknown even to the marketing director of Bofors. These were paid to a company called AE Services . . . Such payments are made when all the numbers are on the table. In the case of AE Services, they came into the contract at the last minute, cut into the commissions of other agents and assured Bofors that they need not be paid if they did not ink the contract within a prescribed time-limit. No middleman has this kind of power. The modus operandi was such that barring a few people, nobody knew what the other person knew.”
The Indian government set up a Joint Parliamentary Committee to probe allegations in August 1987.
The Bofors scandal became a political hot potato and was one of the major reasons for the Congress government losing in the 1989 general elections. V. P. Singh became the prime minister after quitting the Congress and leading an anti-corruption movement.
The CBI registered its first formal complaint in the case in January 1990. However, in the next 15 years, with many of the accused passing away and the courts exonerating others, the case lost much of its steam.
In February 2007, one of the key figures in the case, the Italian businessman Ottavio Quattrocchi, was detained in Argentina. But he could not be extradited. In 2009, the Indian government told the Supreme Court that it had decided to withdraw the case against Quattrocchi since he could not be extradited.
In an interview to Chitra Subramaniam Duella in the media site The Hoot, Sten Lindstrom, the whistleblower who had leaked the documents to her, said: “The $1.3 billion deal with India for the sale of 410 field howitzers, and a supply contract almost twice that amount was the biggest arms deal ever in Sweden. Money marked for development projects was diverted to secure this contract at any cost. Rules were flouted, institutions were bypassed and honest Swedish officials and politicians were kept in the dark.”
In an article in firstpost.com in April 2012, Venky Vembu wrote: [T]here are compelling reasons to argue that Bofors, which has become a living, breathing metaphor for corruption in high places in India, should never be forgotten. Even if the Rs 64 crore payoffs seem like a pittance compared to the monumental scale of corruption scandals today, Bofors will — and ought to — remain as a permanent reminder of just how deep the rot runs in our polity, and of the enormous levers that people in power have to scuttle investigation.”
Also on this day:
1922 — Bhimsen Joshi, legendary Hindustani classical vocalist, was born
1938 — Birju Maharaj, leading exponent of Kathak dance, was born
1948 — Rakesh Shukla, Indian cricketer, was born
1974 — Urmila Matondkar, Indian film actress, was born
1974 — Satyendra Nath Bose, Indian physicist, passed away
1995 — Manohar Hardikar, Indian cricketer, passed away
1997 — Rabi Ghosh, Bengali film actor, passed away
2001 — Pankaj Roy, Indian cricketer, passed away
2002 — Bhagwan Dada, Indian film actor and director, passed away