STOCKHOLM, Aug. 20, Reuter: Swedish armsmaker Bofors said today it would cooperate with a police inquiry probing allegations that it bribed officials close to Indian Prime Minister Rajiv Gandhi in clinching a huge order.

The company once again denied any wrongdoing in its methods of gaining the 1.2 billion dollar contract for artillery field guns from the Indian army last year.

“Bofors naturally intends to assist the investigators in their work,” the company, Sweden’s largest arms firm, said in a statement.

Indian opposition parties, newspapers and some members of Gandhi’s Congress (I) Party welcomed the launch of the Swedish police probe, announced yesterday by Stockholm prosecutor Lars Ringberg.

“There is reason to believe that crimes of bribery have been carried out in connection with this case,” Ringberg said.

Bofors repeated earlier denials of bribery and of any breach of an agreement with Gandhi not to use middlemen in connection with the deal, Sweden’s largest export ‘order.

 

Swedish Foreign Minister Sten Anderson told national radio that the government supported the

probe.

But he added that the order, negotiated with the help of late Prime Minister Olaf Palme and crucial for the Swedish arms industry, could be annulled if bribery was proved.

“There is no reason to assume the worst-case scenario. But there is naturally a risk of that happening,” he said. ;

No independent inquiry by Sweden’s national audit office last May concluded that about 40 million dollars of unaccounted payments had been made to unidentified officials in connection with the deal.

The report said that investigators were unable to uncover full details because of lack of cooperation from Bofors.

The company said any transactions had been severance payments to former agents involved in the deal before a 1985 agreement with Gandhi not to use middlemen. Bofors, citing business secrecy, refused to disclose the recip1ents.

The bribery claim, first aired by Swedish radio, has been seized upon by the Indian opposition and has seriously tarnished Gandhi’s image.

An opinion poll last week showed that 44 per cent of the Indians believe Gandhi was involved in

Bofors payoffs. Gandhi earlier this month made it a resignation issue by telling Parliament: “I categorically declare that neither I nor any member of my family has received any consideration in these transactions. That is the truth”.

The Stockholm newspaper Aftonbladet, quoting unidentified sources, said the unaccounted Bofors payments had gone to the bank accounts of five or six Swiss registered companies and that Ringberg would seek to establish who were behind the accounts.

The investigation extends the web of inquiry surrounding Bofors and its sister companies within the giant Nobel Industries Empire.

Two Nobel employees and a Swedish businessman have been charged with smuggling explosives to Dubai and Bahrain in contravention of neutral Sweden’s strict arms export laws.

Nobel has admitted smuggling of arms to blacklisted countries, including Iran, since the early 1980s.

Article extracted from this publication >>  August 28, 1987