CBI investigating Rs 300 million kickbacks in defence deal

Defence Minister Mulayam Singh Yadav informed the Rajya Sabha on Wednesday that the Central Bureau of Investigation is probing the alleged commission of Rs 300 million collected by a retired lieutenant colonel in a multi-million dollar defence deal.

Yadav -- who did not divulge any other details about the CBI investigation -- said the government would not spare anyone involved in kickbacks in defence deals. India, he added, has made it clear to arms manufacturers in other countries, not to appoint any agent.

In case these companies sought the services of agents, Yadav declared they would be blacklisted.

The minister said India, while finalising the Sukhoi aircraft deal, had asked Russia to include a clause in the agreement that no agent was to be appointed or commissions were to be paid in the deal.

The Government of India had concluded defence agreements worth Rs 100 billion in the past 18 months.

The minister said existing government instructions debar the involvement of agents in the purchase of ''weapons'' or ''weapon systems.''

Contracts concluded by the defence ministry stipulate non-involvement of agents specifying that in case agents are found to be involved in the contract at a later date, the contract will be liable for termination along with refund of payments made under the contract with interest and blacklisting of the company for a minimum period of 5 years. The amount paid as commission to the agent will also have to be refunded.

Yadav said the government would not withdraw its embargo on Bofors till the Swedish company revealed who had received the commissions paid in the howitzer gun deal.

Components worth about Rs 101.6 million were contracted by the Ordnance Factory Board during the period 1993-94 to 1996-97 from Mipro AB of Sweden for the manufacture of weapon and ammunition. It had been confirmed by the Indian embassy in Sweden that Mipro AB did not have any links with Bofors.

Former comptroller and auditor general T N Chaturvedi (BJP) wanted to know if it had been ensured that Mipro was not a third party acting on behalf of the blacklisted Bofors company. The defence minister said the Swedish embassy had affirmed that Mipro was an independent company.

Jayant Malhoutra (BSP) asked Yadav if the defence ministry had any mechanism to ensure that purchases were made directly from a manufacturer rather than any middleman. He also asked if there was any certification from Mipro that it was indeed the manufacturer and not the middleman.

The defence minister said this has already been inquired into and a certification had been sought.

Rajya Sabha Vice-Chairperson Najma Heptulla intervened to tell the defence minister that he could reply later in the day or on Thursday if he wished to verify the facts before making a statement.

EARLIER REPORT: Were kickbacks paid in the Rs 63 billion Sukhoi deal?...