From Bofors To Bulgaria

People’s Democracy

Organ of the Communist Party of India (Marxist)


No. 18

May 02,

Bofors To Bulgaria



election time, it should surprise nobody that accusations of scams be levelled
by both the main contenders, the BJP and the Congress, against each other.
Certainly, neither party is a stranger to scams, even when it comes to that holy
cow of the Indian polity, the defence and armaments sector.


Congress name has become synonymous with that of Bofors, the Swedish
manufacturer of the artillery gun which India procured when the late Rajiv
Gandhi was prime minister, and when the sordid story of kickbacks, cover-ups and
misuse of governmental machinery towards these ends even brought his government
down. The NDA government has had more than its fair of scams: the collapse of
UTI’s flagship US-64 Scheme, the sale of profit-making public sector
undertakings at throwaway prices, the blatant favouring of particular firms in
the petro and telecom sectors through manipulation of policies and regulatory
mechanisms. And who can forget those scenes on national television, forever
etched in the public memory, of the BJP president Bangaru Laxman taking wads of
currency notes and stuffing it into his table drawer. Nor can one forget the
rest of those squalid scenes of various NDA politicos, middle-men and even
“connected” military officers wheeling and dealing in shady defence-related
acquisitions which have made the NDA name synonymous with Tehelka, the
internet-based investigative magazine which conducted the expose.


it really came as no great surprise when a Congress spokesman alleged
irregularities in the procurement of AK-47 machine guns from a Bulgarian firm.
And, given the by now typical response of those in power to such charges, it was
also to be expected that the BJP would resurrect that old favourite, Bofors, as
a counter-attack.


scams in general, and in defence procurement in particular, have become routine
and an integral part of ruling class politics in India, with one scandal
following another and with no systemic correctives in sight. So much so that
scam allegations are now greeted with a cynical “so what else is new?”
And the media in general treats each scam story as just another piece of bazaar
gossip. But the fact that these are election times does not mean that we should
treat these charges and counter-charges as just cheap theatrics. For there are
serious issues at stake here concerning national security, transparency and
accountability in governance, and the system of checks and balances in the
different arms of the State.



begin with, let us look at the recent Bofors revelations and their implications.
The “new” story was broken in a newspaper article by a Swedish former
police officer who was a key figure in the Bofors investigations in Sweden and
who also provided valuable information and insights to some investigative
journalists in India who doggedly followed the saga, who brought it before the
Indian public and who were ahead of official Indian investigations for most of
the time. The fact that the article contained no new facts, was a rehash of
earlier articles by the same officer and others in many Indian magazines and
newspapers, or even the fact that it was coincidentally published (perhaps even
commissioned?) on the eve of elections in a newspaper edited by a recent pro-BJP
convert, should not detract from the veracity of its main points.


article argued that the last words on the Bofors saga are yet to be written,
that everybody now knew who the once-mysterious “R” (Rajiv) and
“Q” (Quattrochhi) mentioned in the then Bofors chief Martin Ardbo’s
diaries were, that it was obvious that payments to “Q” after the deal
was struck were kickbacks, that “Q” was yet to be properly questioned
or arraigned, and that, since he was Sonia Gandhi’s relative and had access to
her household, she too should be questioned about the whole affair. The nation
indeed deserves to know the whole truth, and even those who oppose the NDA and
are campaigning for its defeat, need not shy away from asserting as such.


some other related questions surely deserve answers too. Home minister and
deputy prime minister Advani promptly announced that he had directed the CBI to
investigate the matter in the light of the “dramatic” and “new
evidence” brought to light by the article. Ottavio Quattrochhi has been a
proclaimed offender and wanted in India for all the years that the NDA
government has been in power. Yet he was able to flee the country and has since
been openly operating in Malaysia whose courts the same CBI and others in the
Indian investigative and prosecutorial team were unable to convince about the
seriousness of the charges against him and therefore the need to extradite him
to India. India also did not exert any diplomatic or other pressure on Malaysia,
using as leverage the growing commercial relations between the two countries
especially the lucrative contracts Malaysian firms were awarded in road
construction, petro-chemicals and palm oil. Such pressures were exerted and
indeed paid off in the UAE resulting in the extradition of wanted underworld
elements. But no such efforts were made regarding the notorious “Q”
whose firm Snam Progetti even obtained lucrative fresh petro-chemical contracts
in India during this period!


whole world knew “Q” and the fact that he was a relative of Sonia
Gandhi. What prevented the CBI or the “modern-day Sardar Patel” from
pursuing “Q” or making inquiries of Sonia Gandhi all these years? Did
they really require a reminder from a former Swedish police officer, that too on
the eve of elections? The CBI which has now been “directed” by home
minister Advani to pursue the “new” leads, is the same CBI which is
also supposed to be “investigating” Advani’s role in the demolition
of the Babri Masjid, and the same CBI which has been unable to get Swiss courts
to release hard Bofors-related evidence acknowledged to be available with Swiss
banks and also unable to obtain further information from Martin Ardbo, the
veritable horse’s mouth, still comfortably leading a retired life in Sweden.
And then there is the deafening silence regarding the cryptic “N” of
the Ardbo diaries, “R’s” confidante and relative (widely believed to
be Arun Nehru) who just happens to have found a cozy perch in the BJP. There
have been numerous leads to follow, many avenues to pursue and much hard work to
be done to bring the Bofors truth into the light. But none of this has happened
in any meaningful way so as to bring about results, in much the same manner that
the CBI has gone about prosecuting the Babri Masjid demolition and the
surrounding conspiracy. Is it that it suits the BJP and its allies to keep the
Bofors skeleton inside a cupboard to pull out and rattle whenever it suits them?



now to the other story, the Bulgarian AK-47s, the latest in a long list of scams
in defence-related and armaments acquisitions during the tenure of the BJP-led
government. The purchase of the AK-47s, however, concerns not the defence
ministry headed by George Fernandes but the home minister headed by the
redoubtable “iron man” himself, Lal Krishna Advani.


Rs 53 crore deal (often mistakenly referred to in sections of the press as a Rs
200 billion deal!) for purchase of 64,000 AK-47 automatic rifles to equip Indian
paramilitary forces was struck with the Bulgarian state-owned firm Kintex Share
Holding Company. The Congress spokesman’s allegation was that normal tendering
procedures had been by-passed, that the Bulgarian firm had been inexplicably
given preferential treatment over even the Russian original equipment
manufacturers and further that Kintex was a disreputable firm with questionable
links with terrorists, gun runners and drug smugglers, and whose sister-concern
K A S Engineering Ltd was involved in the 1995 Purulia arms drop conspiracy. The
BJP’s counter was that all procedures were followed, the Bulgarian and rival
weapons were subjected to tests which showed the superiority of the former and
that hard bargaining had enabled a good product to be purchased at a very low


for the firm’s reputation, the BJP quaintly asserted that Kintex was a
State-owned firm! For good measure, the BJP added that it was not good to
question such defence or security-related deals since this affected the morale
of the armed forces, the very same argument used by the Congress during the
Bofors debates in parliament and outside, and by the BJP-Samata party during the
whole unsavoury Tehelka controversy.


detailed clarifications put out by the spokesman of the ministry of home
affairs, and those by BJP spokesman V K Malhotra, have raised as many questions
as they provided answers. They stressed that due process had indeed been
followed, as if that were enough to allay suspicions: the Tehelka tapes in fact
brought out just how it can be made to appear that all procedures have been
followed and, in fact, that kickbacks are given precisely to those officials who
can ensure such an appearance of everything being above board.


the present case, the MHA claims that the first tender put out by it in May 2002
received only a single response, from Kintex, requiring a re-tendering in
September 2002 which brought responses from Kintex and Romtechnica, a Romanian
firm, both of whom quoted prices and sent samples of AK-47 rifles while the
well-known Russian import-export firm Rosboronexport quoted for and sent in
samples of AK-103 rifles. The Russian offer was rejected, said the MHA, because
“it did not meet the tender requirements” neglecting to mention that
the AK-103 is a much more recent and advanced model surpassing the requirements
of the Tender based on the excellent but outdated AK-47 of Second World War
vintage. To have rejected this offer outright is either an extremely rigid
bureaucratic response or an effort to use hide-bound procedures as an excuse to
knock a good competitor out of the race, and one with a long track record of
supplying the Indian armed forces.


selection team interested in choosing the best weapon could well have sought a
revised offer for AK-47s if it was strictly interested in just that type of
weapon. Even Lt General Kalashnikov, the inventor of the AK series of rifles
named after him (Automatik Kalashnikov), is believed to have appealed to the
Indian government to reconsider the offer jointly by Rosboronexport and Izhmash,
the original equipment manufacturer and international patent holder of the AK-47
and other rifles in the series, under license from whom the Bulgarian and
Romanian firms were manufacturing the AK-47s! In the event, the selection team
ignored the Russian offer and “stuck to procedure”.




what about Kintex itself and the charges of its dubious links with various
unsavoury forces? The MHA spokesman said that “it has also been certified
by the Bulgarian Embassy in India that M/S Kintex is a 100 per cent state-owned
company of the government of Bulgaria”. Not only was this a quaint and
rather peculiar defence, but ignores the whole history of this ill-reputed firm.


the end of the Soviet bloc era, the Bulgarian arms industry including the
State-owned Kintex was in the doldrums and looking for hard currency markets,
not discriminating between different kinds of buyers and the use to which the
arms were being put. In the late ‘80s, US president Ronald Reagan used devious
means to arrange for Kintex to supply arms to the anti-Communist Contra rebels
in Nicaragua, possibly using drug money as would later come out during
Congressional investigations. A few years later, Italian police investigating
organised crime identified Kintex as part of one of the world’s largest arms
trafficking organisations linked to Middle-East drug cartels and backed by
powerful bankers in Europe. An Italian firm called Stibam International based in
Milan, headed by a Syrian national who also doubled as an informant for the US
Drug Enforcement Agency, was a major hub of these operations which relied
heavily on Kintex for arms supplies. The same nexus of banks, drug cartels and
arms trafficking, specifically including Kintex, was also used later by the US
government for its clandestine arming of Saddam Hussain in the ‘80s.


and other state-owned Bulgarian arms manufacturing and trading firms have also
been linked by leading European newspapers to the notorious Russian black-market
arms dealers Leonide Minin and Victor But. The US government has declared But
the “world’s number one arms-dealer” and believes him to be Al Qa’ida’s
top source of arms. Bulgarian arms have also been known to have flowed to
Albanian gangs operating in Kosovo and to all manners of fighters in Macedonia
and elsewhere in the Balkans. Turkey has also alleged that Kintex supplied arms
to, and even helped move Al Qa’ida fighters into, Chechnya, something the
Bulgarian government has denied, saying perhaps there was another company of the
same name!


after Bulgaria’s entry into NATO, its arms industry is facing problems because
it is not geared to meeting NATO specifications and standards, and is now facing
new competition from more established and sophisticated American and European
rivals. In the short-term, therefore, firms such as Kintex are more than ever
stressing sales to less demanding markets including India, while Bulgarian arms
have also found their way through intermediaries into rebel hands Iraq where
Bulgarian forces are serving with the US-led coalition!


much for the reputation of Kintex and the belief that, just because it is
State-owned, it should be regarded as being lily white! The MHA’s statement
also seeks to reassure sceptics about the quality of Kintex rifles by stating
that a team designated by the IG of CRPF has inspected the Kintex manufacturing
facility near Sofia and were satisfied by its ability to make quality rifles.
However, there is some doubt as to exactly what manufacturing facility was shown
to the Indian team, since some reports from different European agencies have it
that Kintex actually stopped manufacturing AK-47s in 1989 and that they have
merely been trading these weapons since then, procuring them from different
unnamed and perhaps dubious sources.


suspicion and some revelations is all that it takes for Shri Advani to direct
the CBI to investigate an issue, then the procurement of AK-47s by his ministry
appears to be a fit case for an investigation. But by whom, and towards what


BJP-led government is widely believed to be the most military-friendly
government that India has had. The BJP and its allies, particularly defence
minister George Fernandes, are supposed to have put in place an effective
procurement system which would put an end to unnecessary red-tapism which has
bedevilled security-related procurement and caused huge delays. The whole nation
however knows where this has led. From dubious Kargil-related procurements which
were received after the conflict, to hugely expensive aeronautical-grade
aluminium coffins (who can forget George Fernandes’ marvelous riposte that
these allegations were false because what was procured were not coffins but
caskets!), to Kargil-specific taxes finding their way into the general exchequer
and all the other revelations in the Tehelka tapes which were never
investigated. Time and again, the same defence which the Congress put up during
the Bofors debate, is being fielded by the BJP and its allies who were then part
of the accusing team: that the morale of the armed forces would be adversely
affected, that national security would be weakened, that India’s enemies would


is that full accountability and transparency in such dealings, while ensuring
effective and timely procurement, has yet to be brought about. Apart from
charges and counter-charges, will these elections give us a government which can
deliver on such a promise?