FSRH VIII: THE BOFORS SCAM

Updated: Mar 22, 2021

April 16, 1987, started as a normal day for the late prime minister Rajiv Gandhi; the then defense secretary, S K Bhatnagar; the Hinduja Brothers; Italian businessman, Quattrocchi; and the Bofors company until a radio channel in Sweden triggered a long series of court cases, protests, and face-saving statements by alleging the Indian officials and the Bofors company of a defense scam that would turn out to be one of the greatest scandals of all time; that would eventually topple the red-faced Rajiv Gandhi led Congress Government in the general Lok Sabha election held in the winter of the year 1989.

Bofors scam for the subject of Business Ethics and CSR

On March 18, 1986, India signed a Rs 1,437-crore deal with Swedish arms manufacturer AB Bofors for the supply of 400 155 mm Howitzer guns for the Army. A year later the Swedish radio channel alleged that the company had bribed top Indian politicians and defense personnel to secure the contract. The scandal rocked the Rajiv Gandhi-led government in the late 1980s.

On January 22, 1990, the Central Bureau of Investigation (CBI) lodged an FIR against the then president of Bofors Martin Ardbo, the alleged middleman Win Chadda and the Hinduja brothers for criminal conspiracy, cheating, and forgery. It was alleged that certain public servants and private persons in India and abroad had entered into a criminal conspiracy between 1982 and 1987 in pursuance of which the offenses of bribery, corruption, cheating, and forgery were committed. A Joint Parliamentary Committee (JPC) was set up in 1987 to probe into the sensational allegations.

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The panel was to submit its report in the next two years, coinciding with the parliamentary polls, it was alleged that the Swedish company paid nearly $9 million to politicians, Congress leaders, and bureaucrats. Following the poll outcome, the then Prime Minister VP Singh’s government barred Bofors AB from entering into any defense contract with the government. In January 1990, the CBI registered a case. The first charge sheet in the case was filed against Win Chadda, who was an agent of A B Bofors, Quattrocchi, S K Bhatnagar, Martin Karl Ardbo, who was the president of the gun manufacturer, and the Bofors company.

Around 30 years have passed since then but there has been little progress. A special CBI court in Delhi had discharged Quattrocchi from the case saying the country could not afford to spend hard-earned money on his extradition which had already cost Rs 250 crore. Quattrocchi never appeared before any court in India to face prosecution. He passed away in 2013. The other accused persons who died were Bhatnagar, Chadda, and Ardbo. “Justice delayed is like Justice denied.” The case is still alive in the Supreme Court. India has come a long way since then, but then we have a long journey ahead.

by Yuvraj Pahuja.

THIS POST IS EIGHTH IN THE SERIES TITLED ‘FINANCIAL SCAMS IN RECENT HISTORY’

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