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Sunday, 3 March 2013

From Today's Papers - 03 Mar 2013
Army to study what soldiers want from 7th Pay Commission
Vijay Mohan/TNS

Chandigarh, March 2
Even as the dust is yet to settle on the anomalies brought out in the recommendations by the Sixth Pay Commission, the College of Defence Management (CDM) has launched a study to gather inputs for the Seventh Pay Commission, which is yet to be announced, to enhance emoluments of the armed forces personnel.

The CDM is circulating a detailed questionnaire to serving and retired officers and other ranks as well as the next of kin of deceased personnel to obtain a feedback on the socio-economic environment affecting them and their expectations from the establishment.

CDM is an inter-service institution imparting training to instil contemporary management thoughts, concepts and practices in the senior leadership of the three services. It had undertaken a similar study to provide inputs for the Sixth Pay Commission. Even civilian employees have started drawing up their demands and forwarding representations at taking up their cases at various levels to be considered by the Seventh Pay Commission.

Sources said special focus is being laid by the CDM on the pension of armed forces areas as it has been felt in several quarters that the post-retirement benefits of armed forces personnel have been a major casualty of successive pay commissions. Most armed forces personnel retire at a relatively young age vis-à-vis their civilian counterparts and pension, which is been fixed at 50 per cent of the last drawn salary, is inadequate to meet mid-life responsibilities.

Armed Forces personnel have complained of being given a raw deal by successive pay panels, repeatedly downgrading their status and emoluments and also the bureaucracy arbitrarily introducing various clauses in government orders that have a further adverse effect on original recommendations.

The implementation of the Sixth Pay Commission had resulted in an unprecedented number of anomalies in the fixation of pay, pension and other allowances, resulting in a series of litigation.

Many cases were decided by the courts in favour of the armed forces personnel. Even an anomaly in the Fourth Pay Commission 1986, is yet to be fully settled after having been decided by the Supreme Court in favour of defence personnel. The implementation orders issued by the government created another controversy, with veterans contending that the wording of the court order were "twisted" by the government, thereby denying the full scope of benefits under the judgement.

Study to gather inputs

    The College of Defence Management (CDM) has launched a study to gather inputs for the Seventh Pay Commission, which is yet to be announced
    A questionnaire is being circulated to serving and retired officers and other ranks as well as the next of kin of the deceased personnel about their socio-economic and expectations
    CDM is an inter-service institution imparting training to instil contemporary management thoughts, concepts and practices in the senior leadership of the three services.
Hagel must set the record straight on India soonest
Raj Chengappa

The bombing of Kabul had just begun when I undertook the arduous but exciting journey in October 2001 to cover the Afghan war that would result in the Taliban regime being overthrown by a combination of decisive air strikes by the US-led coalition forces and a ground attack by an array of rebel Afghan forces.

With great difficulty we were able to enter Afghanistan by driving from Dushanbe in Tajikistan to the Afghan border town Khwaja Bahawudin. We had to cross the Amu Darya by boat at night to avoid sniper fire from the Taliban stationed in the surrounding hills.

Among the many memorable meetings I had there was a meal with Attiqullah Baryalai, then a top military commander of the Northern Alliance forces, at his makeshift HQ overlooking the Amu Darya. Over a sumptuous meal that included dal imported from India, Baryalai told us presciently, "The US, like all other invading armies of the past, should remember that it is easy to get into Afghanistan but very difficult to get out. Every army that comes here gets sucked into the vortex."

I remembered Baryalai's words when last week there was a controversy over the remarks made by Chuck Hagel, the new US Defence Secretary, about India's role in Afghanistan when he was a professor in a university in 2011. Hagel had then told an innocuous gathering at Oklahoma University, "India has over the years financed problems for Pakistan in Afghanistan." Concerned that Hagel may still subscribe to such a jaundiced view of India's activities in Afghanistan, the Ministry of External Affairs registered a strong protest.

The US Defence Department did make the right noises and the matter seems to have been sorted out. But doubts linger about a possible US tilt towards Pakistan as Hagel gets down to fulfilling President Barack Obama's promise to his nation to withdraw US troops from Afghanistan in 2014.

The situation in Afghanistan is far from stable and the stakes for India remain high. The last thing India would want is that after the exit of US forces, Pakistan uses Afghanistan as its strategic backyard and ensures that the obscurantist Taliban that had the backing of Islamabad prior to the 2001 Afghan war returns to power again.

Post the 2001 overthrow of the Taliban and the installation of a democratic Afghan government led by Hamid Karzai, India has played its diplomatic cards brilliantly. While the US forces got embroiled in Afghan's internal affairs, as Baryalai had predicted they would, India focused on providing aid to rebuild Afghanistan. It included building critical road links, assisting power generation and setting up health and educational institutions.

Much to Pakistan's chagrin, Afghanistan chose India as the first country to sign an Agreement on Strategic Partnership in October 2011 that ensured cooperation in a range of fields, including political, economic, security and social. By then India had pledged US $ 2 billion in aid, making it the fifth largest bilateral donor to Afghanistan.

India has started training the Afghan National Security Forces, particularly the Afghan National Police. India has also signed memoranda of understanding for the development of minerals and natural gas in Afghanistan. The public sector Steel Authority of India has formed a consortium to invest in mining in the Bamiyan province.

The goodwill that India has generated in Afghanistan is palpable. A worried Islamabad has frequently accused Delhi of using Afghanistan as a base to fund and create internal disturbances in Pakistan. Though there is little substance in Pakistan's charges, Hagel appears to have reflected Islamabad's concerns when he made those unfortunate observations. It is important that Hagel sets the record straight at the earliest if he has to win India's confidence.

The major concern for India now is that the High Peace Council formed by the Afghanistan government to work out a "Peace Process Roadmap to 2015" had in November 2012 come out with a five-step process involving negotiations to make the Taliban and other armed opposition groups part of the government. The US is relying on Pakistan to facilitate the process.

Both Pakistan and the rebel Taliban forces appear to be playing a waiting game so that they could call the shots after the US and international armed forces have withdrawn. India has warned the US that any patchwork political process would jeopardise all gains the international community has achieved during the past decade and plunge Afghanistan into chaos again. History may then repeat itself.

On a visit to Delhi in 2004, Mohammad Zahir Shah, the last king of Afghanistan, told me, "Afghanistan's geographical position has a lot to do with the tumultuous events that have taken place in the past 100 years. It lies in the heart of Asia and at the crossroads of many countries. All I can say is that taking Afghanistan is very easy, controlling Afghanistan is very hard." Zahir Shah died in 2007 but it is good to remember his sombre advice as Afghanistan finds itself once again at the crossroads of history.
Indian Army to include booking ticket through IRCTC as their final round of selection
Delhi: The Indian Army has today decided to do away with SSB round in their selection process and has instead decided to include booking "Tatkal ticket" through IRCTC as their final task in selecting  budding army-men to make the process even more stringent.

"Over the last couple of years we were not getting the kind of soldiers our prestigious history has produced. There was something missing though we were not sure what it is. That's when we realized clearing SSB has become a piece of cake. Any Tom, dick and harry can now boast of clearing it with little practice and guidance, but only a chose few by almighty manage to book tickets through IRCTC. When we had a trial run for same we found this task not only physically draining but also something which is a real test of somebody's mental character, strength and patience. Few of our volunteers who took it upon themselves to test it by booking tickets on IRCTC are now recuperating in AFMC hospital, Pune," said the Army Chief while talking to reporters
"When we checked statistics we were shocked to find number of people dying while trying to book tickets through IRCTC much higher than number of soldiers India has lost on battlefield so far. And thats when we realized what was lacking in the selection process so far. It is not meant for weak-hearted at all. In fact one has to sacrifice everything to achieve success in what we can easily call the hardest task on Planet Earth. Be it your sleep, food, water and even air sometimes (when your heart skips a beat or two after missing it by whiskers) which we found synonymous with how an army personnel is required to lead his life most of the times," added the chief

"And since we also know that if we select only those who are successful in booking  their tickets we will end up with only 2-3 Officers, so after suggestions given by our committee we have also decided to select those who manage to at least log on to the site," clarified the chief much to the relief of aspiring army officers

"Besides this shall also prepare them for the uphill task of booking tickets when they wish to go on leaves to meet their families. As the situation is so bad today that leaves taken by our men for booking tickets through IRCTC are much more than the actual leaves they take to spend time with family," said the chief in a surprised tone.

"We have further decided to honour the successful candidates with Param Vir Chakra for the supreme sacrifice they did while booking tickets. And those who manage to achieve this feat more than twice in their career will be strongly recommended for Bharat Ratna by us," added the chief

When asked what will happen of those unsuccessful candidates who will loose their life in the process and become a martyr even before joining army, the army chief chose not to answer.
HAL's Cheetal Meets Indian Army's Urgent Needs
The Indian Army has placed a $77 million order with Hindustan Aeronautics (HAL) for 20 Cheetal helicopters, a re-engined variant of the Aerospatiale SA 316B Lama that was built under license in India as the Cheetah. The order is a short-term measure for logistics support to the Indian troops on the Siachen Glacier because of delays to the twice-bid competition for 197 reconnaissance and surveillance helicopters (RSH). The future of that requirement is uncertain.

HAL has committed to "supply 20 Cheetals over the next four years besides providing training to its pilots and technical crew," the company said in a statement. It has already delivered nine Cheetals from the 10-aircraft order the Indian Air Force placed as long ago as 2006, an HAL official told AIN. The company is building Cheetals at a rate of one every 16 months. The new version is powered by a Turbomeca TM333 2M2 engine.

"Cheetal is just a lifeline. It is needed urgently because the troops are in a rarified atmosphere and casualties have to be evacuated as fast as possible," an army official told AIN. But with the production of aluminum rotor blades now ended in France by Eurocopter and the TM333 engine also now out of production, there is concern about the supply chain for the Cheetal. With HAL insisting on paying only the price for these items that was charged when they were in full production, a delay in deliveries is inevitable, an MoD official told AIN.

The Cheetal can operate at an altitude of up to almost 23,000 feet and has a range of 346 nm with an endurance of three and a half hours. The TM333 2M2 is fitted with a full authority digital engine control system (Fadec) and an electronic backup control box system that automatically takes over engine control in the event of a Fadec failure, said HAL.

The company describes the Cheetal as "a multirole helicopter, best suited for missions such as personnel transport, casualty evacuation, reconnaissance and aerial survey, logistic air support, rescue operations and underslung loads."
Indian Army joins twitter
Army's Additional Directorate General of Public Information (ADGPI) made its presence known on Twitter on Friday through the handle @adgpi. While conversing on twitter on Saturday with Chandigarh-based lawyer Maj Navdeep Singh, Shashi Tharoor, union minister of state for human resource
development suggested that the new handle appeared a little bureaucratic and should contain 'Indian Army' in its name. Regulars on twitter agreed with Tharoor's suggestion and called for a better twitter handle since the Indian Army on twitter is still in its nascent stages.

Sources say that the Army is soon proactively going to make its presence known on social media with an official Facebook page or even a youtube channel in the offing.

Armies all over the world have been proactive on social media with the US Army leading the way. The US Army not only has most of its commands on twitter but also many senior officers are active on twitter and facebook. Many of the military branches have their own blogs, which are used for constructive exchange of ideas.

While the Indian army has traditionally shied away from technology, due to the fear of security lapses, officers feel that most of such fears result from a knee jerk reaction and there is not much secret or operational information that can be exchanged through social media so as to cause any threat to the security of the nation.
Arms and the middleman

On a wintry day in early 2005, 20 months before the September 27, 2006 Indian Air Force (IAF) tender for buying 12 helicopters to ferry its VVIPs in style, the Indian growth story was getting rave reviews, and at that time, Italian businessman Carlo Gerosa was visiting New Delhi on what was a "routine" business meeting with his Indian collaborators in the international infrastructure development business. His Indian interlocutors were the Tyagi brothers —Julie, Docsa and Sandeep—who had an ongoing business relationship with the Italian major Finmeccanica in the power and railway sectors in India. It didn't turn out to be a routine meeting. The Tyagi brothers had a powerful first cousin—the then Air Chief Marshal S P Tyagi. The IAF would soon be issuing a tender inviting bidders for buying 12 helicopters. The information was passed on to Gerosa, who shared it with his partner in Milan, the US-born Swiss national Guido Ralph Haschke. Haschke, sensing a big opportunity, informed the then Italian helicopter manufacturer AgustaWestland's chief Giuseppe Orsi of Italian business conglomerate Finmeccanica.

This was the beginning of a sordid story of a former IAF chief allegedly getting mired in the murky world of arms deals, and an unexpected opportunity for the Tyagis to venture into the multimillion-dollar world of defence deal making. The rest is history—not appearing in textbooks or in Toyenbee's volumes, but on hidden pages full of the narrative of defence corruption in which the star characters are defence officers,  bureaucrats at all levels, middlemen of all persuasions—freelance and representatives of arms companies—government clerks and of course, subterranean political forces. Says Admiral (Retired) Sureesh Mehta, former Indian Navy chief, "Since big money is involved in defence business, the agent's connection starts at the lowest levels and goes up to the top in the political system." In the last 10 defence scams that have exploded in India since 1981, not a single arms dealer, defence official or a middleman has been convicted. The only one to be a frequent guest of Tihar Jail is the hapless Abhishek Verma, who has currently been jailed for violating the Official Secrets Act. Verma is also an accused in the Scorpene submarine deal while his associate—Ravi Shankaran, who is the nephew of former Navy chief Admiral Arun Prakash—has an extradition case pending against him. Shankaran currently lives in London. Defence deal cases languish in investigative agency files, dusty courtroom archives, swanky law offices and are stuck in the Kafkaesque government chain of command. In 1987, Rajiv Gandhi fell a victim to the Bofors scam while nothing was proved against him or the shadowy Mr Q. In the Barak missile scam—opposed by the then-scientific advisor APJ Abdul Kalam—the CBI concluded that the missiles were bought for a higher price: politician R K Jain and Suresh Nanda—the son of former navy chief Admiral S M Nanda—were arrested but let off because of lack of evidence. Nanda is an active member of Delhi's party scene, so is another colleague Sudhir Choudhury—allegedly involved in fixing the purchase of missiles from Israel.

In the latest AgustaWestland helicopter scam, CBI has filed a preliminary enquiry in the case naming 11 persons including S P Tyagi, his three cousins and their companies. "There is no Mutual Legal Assistance Treaty with several countries and they do not execute the LRs (letters rogatory) even in those cases when our government issues Assurance of Reciprocity. It has also been experienced that the middlemen are as strong in those countries where LR requests/assistance has been required as they are in our country," says a CBI spokesperson. The agency is waiting for the relevant documents from Italy, which are unlikely to arrive because of Italian laws. This may totally hobble investigations against former air chief Tyagi and his relatives—which could effectively mean the death of the case. "The entire process of investigating a defence scam is complex and CBI is inadequately staffed for that," accepts Dr Karthikeyan, former CBI director.

Anguished by the corruption cloud hanging over his ministry, the Mr Clean Defence Minister AK Antony wants the weapons systems to be indigenised. Ironically, Rs 10,640 crore have been spent on defence research by the Defence Research and Development Organisation (DRDO) but not one significant, successful project has taken off. Meanwhile, India continues to be a fertile market for arms buyers and dealers, being the world's second biggest arms importer. This year alone, India bought Rs 60,000 crore worth of arms and Rs 100 crore is pending in orders. "The modernisation of the Indian armed forces is considered to be lagging behind by up to 15 years," says former Indian Army Major General Mrinal Suman, an expert in defence procurements.

The glamorous Armani-clad world, Kristal quaffing world of the arms dealers is a heady mix of endless cocktail parries attended by diplomats, senior defence officers, bureaucrats, journalists, the occasional MP,  foreign defence representatives and middlemen. In attendance is a large phalanx of bottom feeders who facilitate meetings in ministries and do odd jobs for the sake of crumbs at the table. Paid luxury holidays for bureaucrats and politicians are seductive incentives. At networking parties, arm candy is plenty, but honey traps can have embarrassing consequences as the Tehelka sting operation in 2001 or the 2010 Admiral Gorshkov aircraft carrier price negotiation proved. Nobody is too small or too big for the arms dealer to cultivate—from the lowly clerk to the mighty high administrators, from the soldier to an armed forces chief, from MPs to political party presidents, as has often been brought out in many defence scams. The quid pro quo is worth its weight in arms to the dealer: classified information on competitors, tenders and who the ideal conduit is, and the approach route. Espionage between rival firms is rampant—recently, in Paris, private agents of an arms company stole a briefcase containing tender information from a taxi in which a competitor's courier was travelling. Big players in the defence lobbying business come from countries and regions such as Russia, Israel, the Americas, and Europe.

Information is power; arms dealers operate under conditions of extreme secrecy—no email account is used more than once; it's usually Skype or encrypted conversation between associates. As a result, deals are finalised not on the basis of a weapon's quality or merit, but on the basis of tender manipulations, policy tweaks and changes in rules that suit certain sellers.

However, geomilitarily, the pressure on the Indian armed forces to modernise is intense. Striving to catch up with the fast-growing Chinese military and to keep the traditional rival Pakistan at bay, apart from fighting internal conflicts in Kashmir and with Maoists in various states, India is expected to spend around Rs 1 lakh crore over the next decade to buy a variety of weapons, platforms and systems to upgrade its 13 lakh-strong armed forces and 20 lakh central and state police. This has turned India into a "Sunrise" market for global defence firms.  The flip side is that arms agents arrive in droves to grab their slice of the pie in collaboration with local middlemen, despite Indian laws outlawing the practice and prohibiting their participation in deals. The home ministry even keeps a blacklist of these dealers, but many loopholes exist for their business to continue.

Defence scams hurt India's defence planning; even a whiff of scandal results in the purchases being put on hold and future procurements being suspended under the provisions of the massive Defence Procurement Procedure and Manual. "If the blacklisting of HDW had not happened, India would have been a great submarine power. The Indian submarine fleet, a potent arm, is today in an absolute mess because of the blacklisting, and the company was exonerated by the courts after 12 years of litigation. After such a long time of investigations, nobody was found to be guilty, but the navy suffered heavily," says Mehta. The Bofors deal had put an end to modernisation of artillery for three decades. The first purchase of an artillery gun was approved only in 2012, when India decided to buy 145 M777 ultralight howitzers from British major BAE Systems through the foreign military sales route from the US, where the British company has a manufacturing base.

"The government did try to regulate the defence agents by calling for registration. But the policy, based on guidelines issued by the finance ministry in April 1989 but deviating from the simple formulation suggested, were totally directed towards scrutinising past records of agents and regulating their conduct," says Major General Mrinal Suman.

The global defence firms, which appreciate the agents' utility, use them as hatchet men, not only to swing deals in their favour, but also to undercut their competitors' chances in the market, as has happened in the past in the case of the Rs 5,000-crore tender for 197 Light Utility Helicopters for the Indian Army and the IAF in 2007.

In the dark orbits of defence deals, the satellites of scandal are often undetectable. And when it happens, precedents show that their ellipses continue undisturbed.


A quick peek into the

biggest defence scandals that have rocked India

VVIP CHOPPER SCAM 1999 to 2010

Rs 3,600 crore

The Deal: In August 1999, the Indian Air Force mooted a proposal to replace old Mi-8 used by VIPs, including President, Prime Minister, and subsequently a global Request for Proposals (RFP) was issued in March 2002. However, to avoid a single vendor scenario, Brajesh Mishra, principal secretary  to the then Prime Minister Atal Bihari Vajpayee, in November 2003 asked the IAF to amend the operational requirement for fair play in the deal suggesting that Special Protection Group should also be made part of the decision-making process. The decision was finalised during the tenure of George Fernandes as defence minister and Air Chief Marshal S Krishnaswamy as IAF chief. In several meetings between March 2005 and September 2006 changes were incorporated and in-principle approval for procurement of VVIP choppers were accorded during the tenure of Pranab Mukherjee as defence minister and S P Tyagi as chief of Indian Air Force. On September 27, 2006, RFP was issued to six vendors. However, only three vendors—Sikorsky, USA; AgustaWestland, UK; and Rosoboronexport, Russia—responded to the RFP. Field trials carried out in January to February 2008 recommended AgustaWestland for inclusion in the service. On February 8, 2010, the Ministry of Defence (MoD) headed by A K Antony with Air Chief Marshal P V Naik in the IAF office signed the contract with AgustaWestland to procure 12 choppers worth Rs 3,600 crore.

The Scam: 10 per cent kickbacks—approximately Rs 362 crore—paid to middlemen by UK-based Italian company AgustaWestland to swing the deal in favour.

Alleged Middlemen: Guido Ralph Haschke, Christian Michel. Italian investigators allegedly named Former Air Chief S P Tyagi, Sanjeev Tyagi, Sandeep Tyagi, Rajiv Tyagi, and Gautam Khaitan.

The Firm: AgustaWestland Spa, Italy/ UK, a subsidiary of Finmeccanica, Italy.

Probe into Allegation: In February 2012, Italian investigators probing the murky dealings of AgustaWestland's parent company Finmeccanica alleged that the company was involved in a bribery scandal to secure the deal for 12 VVIP choppers with India. Italian investigators submitted two reports—October 2012 and February 2013—after which the MoD referred the case to the CBI. The Indian agency is looking into the kickbacks paid to Indian agents allegedly named by the Italian investigators in preliminary investigation report submitted to an Italian court.

Status: Preliminary Enquiry filed by the CBI on February 24 to probe the role of Indian middlemen.


Rs 3,000 crore

The Deal: In March 2012, the then Army Chief V K Singh disclosed that he was offered Rs 14 crore bribe to clear a file to purchase 600 Tatra trucks for Indian Army. Subsequently, Defence Minister A K Antony while confirming the allegation told Parliament that the incident happened in 2011 and the Army chief at that point of time did not want to pursue the matter. MoD forwarded the case to the CBI which widened the probe in allegation of highly-priced Tatra trucks purchased by the Indian Army since 1986 when late Rajiv Gandhi was holding the portfolio of MoD and General K Sunderji was army chief. According to government data since 1986, India procured 7,000 trucks from the company at higher price causing huge loss to the government exchequer.

The Scam: Suspicious MoUs/ understanding between Tatra UK and Indian PSU Bharat Earth Movers Limited resulting in higher cost of all-terrain trucks.

Alleged Middlemen: Ravi Rishi, Chairman of the Vectra Group, the largest shareholder of Tatra holdings.

The Firms: Tatra Sipox UK. The third oldest truck manufacturer in the world, Tatra is owned by an international consortium comprising Vectra Ltd, UK; KBC Private Equity, Belgium; Ronald Adams, USA and Meadowhill of Czech Republic.

Probe into Allegation: The case was handed over to the CBI on March 30, 2012. CBI is probing that circuitous route was used to sell the trucks first to Venus projects based in Hong Kong at 35 per cent discount rate which in turn was sold to Tatra Sipox UK owned by businessman Ravi Rishi. The same trucks from the UK were later sold to BEML at an inflated rate.

Status: BEML CMD VRS Natrajan was suspended in June 2012. The CBI filed a status report in August 2012. The case is still under investigation.


Rs 1,150 Crore

The Deal: In October 2000, MoD headed by George Fernandes signed a contract with Israel Aircraft Industries for the purchase of seven Barak systems and ammunition. Admiral Sushil Kumar was the naval chief when the contract was signed.

The Scam: Procurement norms were violated by the government. After CBI filed an FIR in 2006, Fernandes told the CBI that he had pressed for the procurement after the then naval chief Admiral Suresh Kumar sent a strong recommendation. It was alleged that the deal was manipulated and kickbacks to the tune of 3 per cent of total value of the deal was paid to the middlemen.

Alleged Middlemen: Suresh Nanda, R K Jain and officials of MoD

The Firm: Israel Aerospace Industries

Probe into Allegation: After Tehelka exposé in 2001, the NDA government set up a commission which gave a clean chit. However, after UPA came to power in 2004 it rejected the commission's report and ordered a CBI investigation. Middleman R K Jain was stung in an operation conducted by Tehelka which claimed that bribe was allegedly paid to George Fernandes. Ex-naval officer Suresh Nanda was also named.

Status: Suresh Nanda and R K Jain were arrested by CBI in 2008 but later were let off.


Rs 19,000 crore

The Deal: In 2005, India approved six Scorpene diesel submarine with a condition of technology transfer at Rs 19,000 crore with the French company Thales. The deal had approval of the then Defence Minister Pranab Mukherjee and Naval Chief Admiral Arun Prakash.

The Scam: Top secret documents related to India's future defence preparedness plan were stolen from the Navy war room and were allegedly passed on to London-based defence agent Ravi Shankaran and his business partner Kulbhushan Parashar to give it to Thales to swing the €3-billion deal. It was alleged that approximately `500 crore was paid to the middlemen.

Alleged Middlemen: Ravi Shankaran, Abhishek Verma, Kulbhushan Parashar

The Firm: Thales, France. Thales has been operating in India since 1953. In July 2011, Thales and Dassault Aviation signed a contract for the upgrade of the IAF's Mirage-2000 fleet.

Probe into Allegation: In December 2005, the navy sacked three officers—Vijendra Rana, Vinod Kumar Jha and Capt. Kashyap Kumar—after conducting an internal enquiry. Subsequently the case was handed over to the CBI in 2006. Shankaran aide Parashar, Abhishek Verma  and Rajrani Jaiswal were arrested by the CBI in 2006. Shankaran is still at large.

Status: CBI filed a chargesheet in October 2006. Extradition case of Shankaran is pending in District Magistrate Westminster's Court, London.


Rs 21 crore

The Deal: The then Defence Minister Fernandes approved a deal with South African firm Denel for the purchase of 1,200 bunker buster anti-material rifles and ammunition. Subsequently three contracts were passed by two army chiefs —Gen V P Malik and Gen S Padmanabhan.

The Scam: It was alleged that Rs 1.7 crore was paid as kickback to Varas Associates, a company based in Isle of Man to swing the deal.

Alleged Middlemen: Varas Associates based in Isle of Man.

The Firm: Denel, South Africa. South African government is the sole shareholder of Denel which was incorporated as a private company in 1992.

Probe into Allegation: The MoD had approved a CBI investigation in the case in 2005 after the scandal rattled the establishment. The premier investigation agency registered a case in June 2005. The CBI had alleged that Varas Associates, which was appointed as an agent for Denel in violation of established norms, was paid 12.75 per cent commission in the deal.

Status: CBI was promised evidence by South African government in 2012. However, the agency is yet to get a reply. Investigation is on.


Rs 6.5 crore

The Deal: During the Kargil war, the NDA government purchased 500 aluminium caskets and 900 body bags from Buitron and Baiza, a US-based company on the nomination basis for the funeral service of martyrs of Kargil war.

The Scam: It was alleged that the NDA government had paid 13 times higher than the original price for the caskets.

Alleged Middlemen: Victor Baiza, Major General Arun Roye, Colonel S K Malik and Colonel F B Singh

The Firm: Buitron & Baiza, Texas -headquartered funeral service company, is little known in the global market.

Probe into Allegation: The CBI registered a case in June 2006 after the Comptroller and Auditor General in its report indicated the existence of middlemen in the deal. After three years of investigation, the CBI filed a chargesheet on August 19, 2009 indicting three senior Indian Army officers—Major General Arun Roye, Colonel S K Malik and Colonel F B Singh—and a US national, Victor Baiza, in the deal. However, it gave a clean chit to Fernandes who was dubbed as 'Coffin Chor' by the Opposition.

Status: Chargesheet filed in August 2009. No conviction


Rs 1,762 crore

The Deal: The MoD headed by Fernandes with Gen Malik as army chief approved 25 defence purchase deals during the Kargil War in 1999 to procure arms and ammunition, including thermal imagers, special ammunition for 40 mm L-70 guns, spare for 155 mm guns etc.

The Scam: It was alleged that the purchase were in violation of contract rules and continued even after the Kargil War causing allegedly over Rs 100 crore loss to the government exchequer.

Alleged Middlemen: Not disclosed

The Firms: Many

Probe into Allegation: A number of cases were registered between 2000 and 2004. After six years of investigation, the MoD decided to close 29 cases in May 2010. The CBI also conveyed to the MoD that it found no violation in the deals related to purchase of Hand-Held Thermal Imagers worth Rs 41 crore, ammunition for T-72 tanks worth Rs 402 crore and other ammunition worth Rs 9 crore.

Status: Three cases are still under investigation.


Rs 6,994 crore

The Deal: On March 24, 1986, a Rs 1,500 -crore defence contract was signed between India and Swedish firm AB Bofors for the supply of 410 field howitzers by the MoD headed by late Rajiv Gandhi with Gen K Sundarji as army chief.

The Scam: It was alleged that Ottavio Quattrocchi, an Italian businessman close to Rajiv, was allegedly paid 3 per cent (`64 crore) of the total contract as commission to secure the deal. The scandal led to the defeat of the Congress government in 1989 General Election. In April 1987, Swedish Radio broke the scandal. Subsequently in August 1987, Bofors admitted kickbacks were paid to swing the deal.

Alleged Middlemen: Quattrocchi, Win Chadha, S K Bhatnagar (the then defence secretary), others.

The Firm: A B Bofors, Sweden. The parent company of Bofors was acquired by SAAB Group in 1999. SAAB is actively working in India and has signed several joint ventures with private and government companies.

Probe into Allegation: A JPC was formed in 1987 which gave a clean chit to the government, saying there was no foul play. V P Singh, who was sworn in as prime minister, ordered a CBI inquiry which had listed 18 alleged beneficiaries of the deal in the preliminary investigation. The investigation dragged on for almost 23 years.

Status: Closure report filed in March 2011. No conviction.


Rs 420 crore

The Deal: On December 11, 1981, the MoD headed by late Indira Gandhi signed an agreement with HDW for two 209-class submarines manufactured in Germany and two other assembled at Mazagaon docks in Mumbai through transfer of technology. Admiral Ronald Lynsdale Pereira was naval chief when the contract was signed by India. HDW was selected over two other firms, Kockums of Sweden and Sauro of Italy.

The Scam: It was alleged that HDW paid Rs 28 crore to an Indian agent as commission to swing the deal. The scandal broke out after the Indian Mission in Bonn wrote to the government confirming involvement of an Indian middleman.

Alleged Middlemen: Not disclosed.

The Firm: HDW, Germany. HDW was blacklisted by India in 1991. However, to upgrade and repair the four submarines purchased in 1987, Indian Navy urged government to lift the ban. Subsequently, in April 2011, the upgrade proposal was approved by the government,  which included replacement of the weapon control system, data link system, torpedoes and missiles. Probe into Allegation: CBI registered a case in March 1990 alleging that the kickback was routed through Swiss banks, including the Bank of Credit Suisse in Geneva. The CBI in its FIR filed in March 1990 had named former vice chief of naval staff Vice Admiral Schunker, former defence secretary S K Bhatnagar and former navy Captain M Kondath as accused in the case.

Status: Closure report filed in March 2003. No conviction

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