NEW DELHI, India, July 19, Reuter: Prime Minister Rajiv Gandhi, caught in a Maelstrom of financial scandal and party rebellion, prepared for a cabinet reshuffle today after losing his second close political ally in 24 hours,

The resignation last night of Arun Singh, a junior Defense Minister and Gandhi confidant, capped the worst week of political turmoil since the 42yearold former airline pilot came to power 31 months ago.

Gandhi’s childhood friend and India’s highest paid movie star Amitabh Bachhan resigned from Parliament on Friday after months of press and opposition allegations of financial wrongdoing.

Another Cabinet Member, Tourism Minister Mufti Mohammad Sayeed, quit last week.

No official reason was given for Singh’s departure but several newspapers reported he was unhappy with Gandhi’s handling of a scandal over kickbacks on a 1.3 billion dollar purchase of artillery for the Indian army from Bofors of Sweden. Singh could not be reached for comment.

The Bofors scandal and the charges against Bachchan have severely jolted Gandhi’s government and his Congress (I) Party which has suffered a string of defeats this year in State elections.

Gandhi expelled three leading Congress dissidents, including his cousin Arun Nehru, from the Party last Wednesday.

He spared the Party’s best known rebel, Vishwanath Pratap Singh, who was forced to resign as Defense Minister in April after ordering an inquiry into alleged payoffs on a submarine deal with a West German firm.

Singh, who has become the focus of anti-Gandhi sentiment in the Party offered his resignation from Congress on Thursday. Gandhi has not accepted it.

Political commentators and Congress sources said the resignations and sackings herald an overhaul of both the Cabinet and top party posts. They said several other ministers were expected to quit.

They believed Gandhi was unlikely to announce the Cabinet reshuffle, his ninth in two years, before President-elect Ramaswamy Venkataraman is sworn in on July 25.

Gandhi today ordered an inquiry into the Swiss holdings of Bachchan’s younger brother Ajitabh.

An official statement said the government investigation would cover all allegations against Ajitabh who lives in Switzerland, an official statement said. The Bachchans have denied the charges in the press and Parliament that they illegally channeled money abroad. Indians are severely restricted in holding foreign assets and obtaining foreign currency.

Amitabh said he resigned because of “unspecified events” of the past few months but several leading newspapers reported that Gandhi ordered his resignation.

The Indian Express, which has hounded Gandhi over the financial scandals, published a photocopied document yesterday which it said proved Ajitabh owned property in Switzerland.

The document, stamped by the registry of property in the Swiss town of vevey, listed Ajitabh as the owner of a flat estimated by the Express to be worth one million Swiss francs (645,000 dollars).

Prominent lawyer Ram Jethmalani, who has published 10 questions a day on the scandals for Gandhi for the past month in leading newspapers, called Amitabh’s resignation an admission of guilt.

Addressing Gandhi, Jethmalani said: “His conduct is as eloquent as your silence coupled with inaction. It is a public confession of guilt. It is evidence against you as well”.

An opinion poll published today showed the damage the scandals were wreaking among Gandhi’s traditional supporters, the middle class.

A poll in Sunday magazine showed that half those earning more than 200 dollars a month believed Gandhi had personally received part of the alleged commission on the Bofors deal.

Sixty nine percent thought Gandhi’s friends had received kick: backs.

Article extracted from this publication >>  July 24, 1987