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India to investigate agents' role in all major defence deals

NEW DELHI: India has ordered an investigation into the role of middlemen in all major defence equipment purchase contracts going back some 15 years.

Defence Minister George Fernandes has asked the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI) to carry out the probe, according to a Defence Ministry statement dated February 5 and made available to Reuters on Sunday.

"CVC is being requested to probe the allegations of presence of agents in all identified major procurement decisions that have been taken since 1985/86," it said, referring to the fiscal year that runs from April to March. "CVC has been requested to have a thorough investigation conducted by CBI."

The India government had banned the use of middlemen in defence purchases from that year.

Indian federal police said last October they had charged a former defence official and three businessmen with wrongdoing over a $1.3 billion deal in 1986 to purchase artillery made by Sweden's Bofors group.

Former Prime Minister Rajiv Gandhi, who was assassinated in 1991, was named as a co-accused in the case -- "accused not sent up for trial as he is no more," authorities told the courts.

The Defence Ministry statement did not detail the value of purchase contracts over the last 15 years, but the Sunday Times of India estimated it at $6 billion to $7 billion.

The defence ministry statement said the probes were ordered following allegations of wrongdoing and in order to introduce transparency in the contracts.

"Allegations/insinuations continue to be made even about such major purchase decisions which have been pending for years and which have not been finalised yet."

It added that Fernandes had asked the Comptroller and Auditor General (CAG) to investigate "allegations of excessive and wrong purchase of spares in the last 15 years".

The CAG has also been asked to conduct a special audit of emergency purchases during military operations in the Kargil heights of the northern state of Jammu and Kashmir last summer.

The Kargil military operations cost India 19.84 billion rupees ($457 million).

The statement said it was likely that all future purchases of defence equipment would be subjected to mandatory scrutiny by the CVC or CAG. -Reuters