CBI's hawala fiasco bails out Gujral in Bofors case

George Iype in New Delhi

The Central Bureau of Investigation's failure to corroborate charges against prominent politicians in the sensational Jain hawala case has forced the Inder Kumar Gujral government to withhold permission to prosecute a number of former public servants in the controversial Bofors scandal.

The CBI's charges against senior politicians like L K Advani, Madan Lal Khurana, V C Shukla, Arjun Singh, N D Tiwari, Madhavrao Scindia and R K Dhawan have collapsed in Delhi courts which exonerated these leaders rejecting the infamous Jain diaries as "inadmissible evidence".

The hawala fiasco has considerably eroded the apex investigating agency's credibility. But it has helped the United Front government to tread cautiously on the Bofors report which the CBI submitted on May 13.

The Union law ministry, which is now examining the 300-page Bofors report, is of the view that the CBI's prosecution charges against a number of former public servants cannot be converted into absolute legal evidence before a court of law.

"We doubt whether the Bofors report will withstand judicial scrutiny as it has certain legal weaknesses. Therefore, the government will seek more details from the CBI before giving it permission for prosecution," a senior law ministry official told Rediff On The NeT.

According to him, the Bofors case might also end up like the hawala cases. The CBI's Bofors report fails to establish any concrete evidence that bribes were paid to Indian public servants.

The official said the CBI is also "unclear" how it will extradite the Malaysia-based Italian businessman Ottavio Quattrocchi and the UAE-based former Bofors agent Win Chadha, who are the main accused in the multi-million dollar howitzer scandal.

While Quattrocchi, reportedly a close friend of Rajiv Gandhi, allegedly received Rs 90 million, Chadha got Rs 200 million for striking the country's biggest defence deal with the Swedish arms manufacturer, A B Bofors.

The CBI report is based on two sets of secret bank documents that the Indian authorities received from the Swiss government in January. Besides Rajiv Gandhi, it has named former external affairs minister Madhavsinh Solanki, former special secretary to the then prime minister, Gopi Arora, former defence secretary S K Bhatnagar as accused in the scandal.

Rajiv Gandhi has been accused of hatching a conspiracy to cause wilful loss to the exchequer by allowing Quattrocchi and Chadha to strike the defence deal with Bofors.

Sources said the government wants the CBI to follow up certain aspects of the case. First, the government wants the agency to examine the third set of secret papers from the Swiss authorities, which are expected to arrive from Berne any time now.

Second, it wants the CBI to get replies to its letter rogatories from Panama, the Channel Islands and the Isle of Man, where the Bofors payoffs money allegedly travelled from the Swiss bank accounts.

Third, the government might ask CBI director Joginder Singh to examine 15 classified defence files to corroborate the agency's report. Though Singh had sought the ministry's permission to de-classify these files, he went ahead and finalised the Bofors report without examining them.

Officials say the Gujral government's conditions stem from the CBI's utter failure in the hawala case.

Though the CBI had initially decided to move the Supreme Court against the Delhi court verdicts in the hawala case, it has so far failed to file the requisite special leave petitions.

Many believe the hawala verdicts are a godsend for Gujral who has been reluctant to give permission to the CBI in the Bofors case, fearing a Congress revolt. The Congress has already attacked the government, alleging that the inclusion of Rajiv Gandhi's name in the CBI's Bofors report is a politically motivated decision.