NEW DELHI, India, June 4, Reuter: The Swedish government today told India “considerable amounts” had been paid in connection with the 1.3 billion dollar arms deal between the Indjan government and Bofors, the Swedish arms company.
But a report handed over to the Indian government by the Swedish Embassy here raised as many questions as it answered. Only Bofors itself, it said, “Is in a position to give a full account of its own payments. The government (of Sweden) has urged AB Bofors to assist in shedding light on the matter”.
India requested a probe by Sweden’s National Audit Bureau after allegations of massive payoffs to Indian officials to secure Sweden’s biggest export contract.
The company signed the deal last year for the supply of FH77 field guns to the Indian army after agreeing that no middlemen would be involved in securing the contract. The Indian External Affairs Ministry today released part of the Audit Bureau’s report along with a note from the Swedish Embassy requesting that other parts of it be kept secret.
The report, based on information from the bank of Sweden, said up to two or three per cent of the contract value had been paid butit would not say to whom.
However, it quoted Bofors as saying all payments were legal, that they did not violate Swedish laws and that none of the payments was to any Indian company or Indian citizen. Bofors told Swedish investigators the payments had been made to a Swiss company. But the Audit Bureau said it had decided not to press for clarification from the Swiss banks.
The allegation of payoffs, first made over the official Swedish radio, caused a major political row in India with newspapers and opposition groups demanding more information.
For weeks, newspapers speculated on the nature of the payments and the reports along with accusations of similar illegal commissions for the purchase of West German submarines tarnished the “Mr. Clean” image of Prime Minister Rajiv Gandhi.
The Swedish report said an agreement existed between Bofors and someone it did not name for payment of commissions. “Conaderable amounts have been paid subsequently to, among others, AB Bofors’ previous agent in India”, it added.
At the same time it quoted Bofors as saying there were “no agreements on commission” and) that previously used local contacts had been wound up before the deal was concluded.
Bofors also said up to two or three per cent of the contract value or 170 to 250 million Kroner (27 to 40 million dollars) had been paid as “winding up costs” to the contacts.
Article extracted from this publication >> June 12, 1987
