From: guru@engin.umich.edu ( V. Guru Shankar)
Subject: Delhi High Court quashes government inquiry into arms bribery scandal
Date: Wed, 02 Sep 92 12:37:53 EDT
Organization: The University of Michigan, Ann Arbor

UPI reports (Sept 2nd):
======================

	NEW DELHI, India (UPI) -- An Indian court Wednesday quashed a
government inquiry into India's worst arms bribery scandal that
contributed to the political downfall of Prime Minister Rajiv Gandhi.
	The scandal involved the payment of kickbacks in a $1.3 billion deal
for artillery guns with Bofors, Sweden's state-owned arms manufacturer.
	Sweden has admitted that commissions were paid to unidentified agents
in the deal despite a contractual pledge that there would be no
middlemen. The commissions were paid into secret Swiss bank accounts.
	Indian opposition parties repeatedly have alleged that Gandhi, who
was assassinated last year, and his Italian-born wife, Sonia, personally
profited from the Bofors deal.
	The ruling of the Delhi High Court came at a time when a Swiss
cantonal court was close to delivering its judgment in a lawsuit filed
by the Indian government. The suit sought access for Indian criminal
investigators to bank documents that could help identify the recipients
of the bribes.
	The court, however, terminated all criminal investigations in the
case, including those initiated by India in Switzerland and Sweden.
	The scandal was an important factor in the ouster of Gandhi's
government in the 1989 national elections. Gandhi was seeking to return
to power in last year's elections when he was slain by a woman bomber
who came to garland him.
	The high court's action came on a lawsuit filed by the Bofors main
agent in India, Wisheshwar N. Chadha, now a Swiss resident.
	The court ruled that the preliminary charges filed against Chadha by
the Central Bureau of Investigation, the Indian equivalent of the U.S.
Federal Bureau of Investigation, appeared aimed at making him a
scapegoat. It pointed out that the agency had failed to charge a single
bureaucrat despite its lengthy investigations.
	``Without naming any public servant as an accused during all these 31
months when there was no stay order in the case, the investigation
cannot be allowed to continue against the petitioner on the basis of
surmises and conjectures,'' the court ruling by two justices said.
	The investigation agency said it would petition India's Supreme Court
to overturn the lower court's order and let it continue with its probe.
	It was considered likely that the Supreme Court would allow the
agency to continue its investigations into the kickbacks because only
last Friday it reprimanded a Delhi High Court justice for an earlier
ruling that faulted the preliminary charges in the case.
	The latest high court order was seen as an outrage by India's main
opposition parties, which have charged the governing Congress party with
deliberately slowing down the criminal investigations.
	Opposition leaders questioned the impartiality of the two high court
judges.
	The Congress party returned to power in June 1991 a month after its
leader, Gandhi, was killed.
	The arms deal -- Sweden's largest ever -- was concluded in 1986, two
years after Gandhi succeeeded his assassinated mother, Prime Minister
Indira Gandhi.
	The deal, along with a subsequent scandal about kickbacks in a West
German submarine contract, helped tarnish Gandhi's cultivated image as
India's ``Mr. Clean.'' Despite his death, the Bofors case remains a
major ammunition in the opposition arsenal.
	The scandal was first broken by Swedish Radio, which reported that an
overseas-based Indian trading family, with close ties to the Gandhi
family, had received a $13.5 million commission from Bofors for helping
secure the howitzer contract.
	Before's Gandhi's slaying, an Indian parliamentary inquiry dominated
by members of his Congress party ruled there was no evidence that
middlemen were employed. But it said three overseas firms that appeared
to be tax shelters were paid nearly $54 million by Bofors as ``winding-
up charges for terminating agreements for consultancy and marketing
services.''
	The Swedish Auditing Bureau, however, confirmed that Bofors paid
between $27 million to $38 million to unnamed agents in the deal.
	Bofors, which sold 400 155-mm howitzers to India, has consistently
refused to identify the recipients of kickbacks, and the Swedish
government has closed its own inquiry into the case.


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