How a nation was looted

It began in the 1970s. International arms firms and middlemen started employing ex-servicemen in India. Today, almost every firm dealing in arms and ammunition has several retired defence officers -- either as consultants or full-time employees -- on their rolls. They help in extracting classified details and specifications from the armed forces headquarters.

On-record complaints from service officers allege that Admiral S M Nanda (retd) was one of the masterminds of this technique. When Nanda decided to enter the military spares supply field, he packed his firm with retired defence officials. His flagship company, Crown Corporation, now a leading arms trading firm, has numerous retired officers on its rolls. His son, Lt Commander Suresh Nanda, a navy officer who took premature retirement, heads its London branch.

Though Admiral Nanda claimed he was only looking to help retired officers, no one could deny the fact that these officers have a good network. "They are familiar with important officers and have free access to the defence headquarters as well as its files," says a senior Army officer.

Last year, when India was negotiating the purchase of the T-90 tanks, there were allegations galore that some senior retired Army officials, including at least one former lieutenant general, were actively involved in the deal. As in most defence deals, though, there is no credible proof.

But, in the case of the INS Shakti, which went in for a refit some time in the last decade, there is proof. Seaking Marine, the company involved in the refit, has many retired naval officers and relatives of senior naval officers on its rolls. It floated several bogus firms, with the stated purpose of 'manufacturing naval defence spare parts for ships in the INS Shakti category'. This, despite the fact that there were no more ships of this class awaiting a refit.

Yet, the defence ministry issued them capacity verification certificates. (The rules state that, if Indian and foreign firms are competing for the same defence contract, the Indian firm is to be favoured even if it is more expensive). They were allowed to import 'samples' of the proposed spares, which were later offered to the Navy at highly inflated prices.

INS Shakti's sister ship, the INS Deepak, had undergone a refit from 1983 to 1986. As a result, items worth about Rs 4 crores were lying unused in the stores. "They could have been used for INS Shakti," says a retired officer who was involved in the refit. He adds that several high value items, which were not required for both ships, were also ordered at the time. Some of them, like boiler control panels and turbine control panels, were lying in the stores till recently.

Rear Admiral S V Purohit had, in a written complaint, said, "This operation was masterminded by those involved in the log refit of INS Deepak while they were still in service, in conjunction with commercial interests." When Purohit, who was then a director level officer at the naval headquarters, began to investigate the case, he was replaced by Commodore N Krishnan. The latter was issued a letter of displeasure for his role in the entire episode.

Purohit was, in fact, even offered the much sought after command of the of INS Hamla, the only command available to logistics cadre officers. He turned it down and was moved to Bombay, where he continued with his investigation into the INS Shakti case. A retired senior Naval officer says Purohit was able to prove how these bogus firms operated and how they conned the Navy of several crores. It was, he says, a joke in Naval circles that one such firm actually operated from a two-room medical store in Ghatkopar, Bombay.

Though Purohit's initial reports were ignored by the Naval headquarters, he persisted until an inquiry was ordered. It is a different story that the officer heading the inquiry was changed three times and the inquiry itself was continuously delayed. After more than a decade, it finally concluded this February with the dismissal of a civilian officer.

Purohit's letters to the naval headquarters have revealed how the Seaking-floated bogus firms used ex-servicemen to promote their interests.

In the meanwhile, an officer like Purohit has been denied promotion three times. He has now moved the Delhi high court against this injustice.

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