The Bofors scandal was a major, weapons-contract political scandal that occurred between India and Sweden during the 1980s and 1990s, initiated by Indian National Congress (Congress party) politicians and implicating the Indian prime minister, Rajiv Gandhi, and several other members of the Indian and Swedish governments who were accused of receiving kickbacks from Bofors AB, a bank principally financed by the Wallenberg family’s Skandinaviska Enskilda Banken, for winning a bid to supply India’s 155 mm field howitzer. The scandal relates to illegal kickbacks paid in a US$1.4-billion deal between the Swedish arms manufacturer Bofors with the government of India for the sale of 410 field howitzer guns, and a supply contract almost twice that amount. It was the biggest arms deal ever in Sweden, and money marked for development projects was diverted to secure this contract at any cost. The investigations revealed flouting of rules and bypassing of institutions.

On 16 April 1987, a Swedish newspaper broke out a story based on a whistleblower in the Swedish police, alleging that the reputed Swedish artillery manufacturer Bofors had paid kickbacks to people in several countries, including Sweden and India, to secure a Rs 1,500-crore contract. This had been done the previous year for a deal to supply 410 155-mm calibre howitzer guns for the Indian army. However, none of the newspapers in India were aware of this. In May 1986, a broadcast by a Swedish radio station revealed that bribes of Rs. 60 crore had been paid by Bofors to Indian politicians, members of the Congress party and bureaucrats. This was picked up by a young journalist from The Hindu, Chitra Subramaniam, who happened to be in Sweden at that time, covering another story. The scale of the corruption was far worse than any that Sweden and India had seen before and directly led to the defeat of Gandhi’s ruling Indian National Congress party in the November 1989 general elections. The Swedish company paid ₹640 million (US$8.9 million) in kickbacks to top Indian politicians and key defence officials.

The case came into light during Vishwanath Pratap Singh’s tenure as defence minister, and was revealed through investigative journalism tipped off by a Reuters news revelation on Swedish radio, followed up by a team led by N. Ram of the newspaper The Hindu. The journalist who secured the over 350 documents that detailed the payoffs was Chitra Subramaniam reporting for The Hindu. Later the articles were published in The Indian Express and The Statesman when The Hindu stopped publishing stories about the Bofors scandal under immense government pressure and Chitra Subramaniam moved to the two newspapers. In an interview with her, published in The Hoot in April 2012 on the 25th anniversary of the revelations, Sten Lindstrom, former chief of Swedish police, discussed why he leaked the documents to her and the role of whistle-blowers in a democracy.

Political Effects

The Bofors scandal was a major issue that was highlighted in subsequent elections, which led to the Congress losing power. Though it was widely believed that V.P.Singh resigned from Rajiv Gandhi’s cabinet due to the Bofors scandal, Singh clarified that he had resiged due to differences in the cabinet in commissions taken by Indian agents in the HDW submarine deal (Shishumar class).

In an interview in 2017, the BJP MP Subramaniam Swamy opined that the revelation of the Bofors scandal was largely a making of people who wanted the Sovient Union’s monopoly over selling arms and weapons to Indian to continue. Till 1984, Soviet Union was the major arms and weapons seller to the Indian government. Rajiv Gandhi wanted to change this and allow purchases from other countries that could be more competitively priced. Hence for the purchase of high altitude guns for the army, tenders were invited from companies around the world, to be chosen on the basis of weapon quality and costs. The finalists were Bofors and a French company. The former was given the contract. Swamy agreed that commissions were indeed paid in the purchase, however the guns themselves were of good quality as he discovered during a revisit of this contract which was carried out during the V.P.Singh government. Bofors was hence removed from the Indian government’s blacklist and the government continued to purchase guns from them.

Middleman in Indian Arms Deal

Middlemen were employed in arms deals in India, both during the British Raj as well as in independent India, and commissions were paid to them under various headings and guises. Some of these were paid as personal bribes while others were paid as contributions to political parties. This led to high levels of corruption, and payments being made to politicians, bureaucrats and defense personnel to influence decisions. This practice was made illegal by Rajiv Gandhi in 1985 as it led to large kickbacks being paid in defence deals, especially those related to aircraft and ships.

Ironically, in 2015, the Government of India under the Narendra Modi government made the use of middlemen in arms deals legal, if they called themselves “company representatives”. The then defense minister Manohar Parrikar announced that in such cases, middlemen would be paid by the government for fixing arms deals under the name of “legal fees”.

Allegations against CBI

CBI has been criticised by experts, social workers, political parties and people at large for the manner in which it has handled this case. Some points to be noted:

  • Delay in lodging an FIR
  • Delay in sending letter rogatories
  • Not appealing against the judgement of the Delhi High Court in 2004
  • De-freezing of Quattrocchi’s bank account in London by saying to the Crown Prosecutor that there is no case against Quattrocchi
  • Putting up a very weak case for Quattrocchi’s extradition from Argentina. Subsequently, no appeal against lower court’s verdict
  • The withdrawal of the Interpol Red Corner notice
  • Finally, withdrawal of its case against Quattrocchi. Reacting to this, Chief Metropolitan Magistrate Vinod Yadav said that, “I agree that there are certain malafide intentions in the case and there is no doubt in that

Leave a Reply

Your email address will not be published. Required fields are marked *