STOCKHOLM: “How to cover a bribe to cover a bribe?” this is the dilemma confronting the Bofors management today.

 The dilemma has arisen because of suggestions made on behalf of the Prime Minister, Rajiv Gandhi, to a Bofors delegation which visited India in July to bail him and his Congress party out of the Borors bribes scandals before the general elections.

 Bofors was told that this could be done if it paid to India at least 200 million kroners as compensation for paying 319 million kroners in the secret accounts of three companies in Switzerland to secure the gun deal with India.

The three companies were Svenska Inc. (188 million). Moresco (over 80 million) and AE Services, London (50 million).

The Social Democratic daily Arbetet made the disclosure last month under a four column heading “Indian elections may cost Bofors dear.” It said Bofors would find it difficult not to comply with the suggestion since it was expecting an order worth 10,000 mil- lion kroners for licensed production of the Howitzer in India any time.

The Arbetet is a respected newspaper belonging to the ruling party in Sweden. MrSten Anders- son, the Swedish Foreign Minister, is a frequent contributor to the newspaper and his information scretary is the wife of the Arbeter’s chief editor.

The Bofors chief information director, Mr. Borje Johansson, when contacted on the phone by this reporter for his comments, said he had heard no such thing from the Bofors management. “The Arbetet alone bears the responsibility for the report” he said.” We are expecting an offer from India any moment. We stand ready to send a delegation to India which is perfectly satisfied with the performance of our supply con- tract and deliveries, according to schedule, of the guns and ammunition. We have had no complaints from the Indian Government with regard to them in any respect”.

A highly placed source within Bofors, however, confirmed that it was no secret that the Indians had, from time to time, urged Bofors to make full recompense for payment of 319 million kroners to the three companies in Switzerland, as Bofors had acted in breach of the Indian Government stipulation that no middlemen shall be employed and no commissions paid in connection with the deal.

The last time this suggestion was made was at the sitting of the Joint Parliamentary Committee on April 7, 1988. Bofors senior vice president, Morberg, and their chief jurist, Lars Gothlin, rejected the suggestion, saying that the payments represented cost for termination of the contracts and not commissions. No evidence to the contrary had been produced by anyone, they told the Joint Parliamentary Committee. Mr. Arun Singh, former Minister of State for Defence had urged Bofors to pay another 319 million to India as damages for acting in breach of the stipulation.

It is the disclosure by the Arbetet and the expected hearings by the Constitution Committee of the Swedish Parliament on the Bofors scandals and the roles of Mr. Lars Ringberg, chief public prosecutor. And the Government, which are providing a hurdle in the way   of Bofors.

Any payment now would constitute an open admission by Bofors of having acted in breach of its promise to India. They had declined to show the JPC contracts or give the names of the parties concerned, pleading business confidentiality.

The details of the licensed agreement were finalised in March 1986. They related to credits, rates of interests, India purchasing kits for a minimum manufacture of 20 guns per year. It would be difficult for Bofors to incorporate the payment in terms of the new contract. The only clause which would be utilised was the enabling clause for the counter purchase of goods from India by Bofors.

 But the whole exercise will bring all the scandals into limelight afresh. It might even backfire for Gandhi. The Swedish Ambassador, Axel Edlestam, said that the then Defence Secretary, S.K Bhatnagar came and wept over his shoulders when Ram Jethmalani made public allegations about the involvement of men close to Gandhi in the Bofors bribery scandals. It is presumed that neither Gandhi nor the Congress Party would like to have such negative publicity before the elections.

Article extracted from this publication >>  October 13, 1989