Latest revision as of 12:49, 13 April 2025

[edit] The scandal of 1987

India Today, December 29, 2008

Gunjeet K. Sra

The Bofors scandal, 1987-1996: One of the biggest political scams in the country till date, involving Rs 64 crore. It was responsible for Rajiv Gandhi’s defeat in the November 1989 general elections.

[edit] The whistleblower

Coomi Kapoor, Feb 28, 2025: The Indian Express

The term, Deep Throat, has become part of our vocabulary in recognition of the whistleblower who provided invaluable leads to The Washington Post reporters in the Watergate investigations. But despite the reams of publicity on the Bofors affair over nearly 30 years, few are aware of the identity of the low key senior Swedish police officer who surreptitiously handed over scores of secret documents to investigative journalist Chitra Subramaniam, which conclusively nailed the lies of successive Congress governments that no kickbacks were involved in the Bofors field gun purchase.

Subramaniam nicknamed her principal source simply as “Sting’’. His real name, Sten Lindstrom, surfaced for the first time in 2012 and even then went largely unnoticed.

The fascinating story of the whistleblower, who stuck his neck out and provided a plethora of evidence of payments in commissions in Swiss banks in the $1.3-billion gun deal is told in detail for the first time in Subramaniam’s new book Bofors Gate (Juggernaut).

Appropriately, the book is to be released next month by Lindstrom’s daughter Ylva Laestadius in Delhi. It’s also a celebration of the finest in investigative journalism, ironically, when everything about the profession is being contested – the latest being the bizarre directive from the owner, of none else than The Washington Post, to its editors on what views to publish and what not to publish!

If there was a political outcry in India when Swedish Radio first broke the story that Bofors had won Sweden’s biggest arms contract by paying bribes to senior Indian politicians through secret Swiss bank accounts, the sense of betrayal in Sweden was no less. If then Prime Minister Rajiv Gandhi’s reputation as Mr Clean lay in tatters, there was similar fury in Sweden against its political class, including the late Prime Minister Olaf Palme, who in January 1985 had agreed on the broad outlines of the howitzer deal with Rajiv Gandhi.

Both PMs had proclaimed that there would be no middlemen. The image of Sweden and Palme, as the world’s conscience keeper championing world peace and disarmament, was in question. (Palme was fatally wounded by a single gunshot while walking home from the cinema in February 1986).

The Bofors scandal exposed the political involvement in Sweden which broke all rules including those which the pacifist country had set for itself, forbidding arms and ammunition export to countries at war or in volatile areas. This clause was waived for the Indian deal. Institutions were by-passed and upright Swedish officials and politicians kept in the dark.

When Carl Fredrik Algernon, Head of the National Swedish War Materials Inspectorate, learnt how Sweden was, systematically, circumventing laws to sell arms abroad, he had a heated discussion with top Bofors and Swedish government officials, furious that his office had been compromised behind his back. Soon after the meeting, he fell to his death in a Stockholm subway, three months before the story broke on Swedish radio. Incidentally, notes found in his briefcase mentioned illegal sales.

Bofors marketing head Martin Ardbo was to acknowledge that Bofors routinely paid commissions to middlemen to win contracts. This was legally permissible so long as it did not involve politicians. The problem cropped up when Hans Ekblom, then head of Bofors marketing, became curious about a mysterious company A E Services. Ekblom wanted to know how had the company entered the picture so late, in August 1985, and questioned what work it had done to merit $7.3 million – and a cut in others’ commissions. According to sources, Ekblom was on the verge of a nervous breakdown over the howitzer deal.

The story of the Bofors payoffs might have remained untold if Riksbank, Sweden’s national bank, surprised that such large sums of money had been transferred to Swiss bank accounts, had not asked for a clarification whether these huge amounts were correctly coded as commissions. Per Ove Morberg, then the administrative head of Bofors, personally went to the bank and waved a piece of paper saying it was part of the Bofors India contract. The bank then asked if the money was a legitimate three per cent commission why was it paid secretly in Switzerland. The response was enough to make the government suspicious and order an inquiry. Shortly, Swedish Radio made its sensational disclosure.

The Swedish National Audit Bureau submitted a report inquiring into the allegations made by Swedish Radio. Parts of the audit report were redacted. Following this, Sweden’s chief prosecutor Lars Ringberg launched an independent investigation. As a journalist based in Switzerland working for The Hindu newspaper, Subramaniam was desperately chasing the story following every possible lead by phoning dozens of potential sources, from arms dealers to journalists and investigators.

A week before the birth of her son, a friend gave her the phone number of someone in Sweden who might be able to help. At that time, she had no clue who the man on the phone was, whom she nicknamed Sting. She was not even aware of his occupation. At first, she did not find him particularly helpful. His standard response being that she would have to “wait and see’’ for Ringberg’s inquiry.

She had no clue until much later that this uncommunicative stranger would eventually turn out to be her principal source. In October 1987, Sting suggested she come to Sweden if she was serious about pursuing the story but cautioned that he would call her — she should not try and contact him. When Subramaniam arrived in Sweden, where she had gone to meet several contacts, Sting finally came to meet her on the last day. Subramaniam could not believe what she was hearing when he introduced himself as the head of Swedish police who was leading the investigation into the Bofors-India gun deal.

Sting explained he had been checking her antecedents and testing her resolve before he decided to share any information. Over time, he provided a treasure trove of evidence and shared dozens of documents including the famous Ardbeg diaries with its giveaway references to Q, H and N.

It even had a telling sentence about Ardbeg meeting a Gandhi trust lawyer with the account holder of the mysterious shell company, A E Services. Sting expected Subramaniam to work out the significance of the various documents for herself. He made clear he was helping her as an individual and not her newspaper proprietor.

Sting, like many Swedes of his generation, had been raised in the best traditions of social democracy. Idealists who believed institutions and political and social systems should be built around principles. Bofors-India was a wake up for most Swedes who thought that corruption happened only in faraway countries and not in their beloved homeland. Sting turned whistle blower – and broke a silence that, to this day, echoes in the discourse around corruption and politics.

[edit] Why Sweden stopped the Bofors probe

`Sweden stopped probe to save Rajiv blushes’, Jan 26, 2017 The Times of India

Declassified CIA Papers Resurrect Bofors Ghost

Resurrecting the Bofors ghost, a recently declassified CIA report said Sweden stopped investigations into alleged bribery in the howitzer deal in 1988 to spare former PM Rajiv Gandhi from embarrassment.This happened after Rajiv visited Stockholm that year.That payoff scandal had cost him his government.

The CIA in its secret 1988 report, titled `Sweden's Bofors Arms Scandal' said Stockholm had “called off the investigation of Bofors' bribery , probably in an effort to prevent future revelations of bribes to Indian officials that could embarrass PM Gandhi“.

“Following the national audit, Swedish police launched a separate investigation into Bofors bribery , which would have been illegal if payments were made to foreign officials. This investigation was terminated in late January 1988, following a trip by Indian PM Gandhi to Stockholm,“ the report said. “Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance,“ it added. The report listed the vari ous allegations against Bofors, saying the company allegedly bribed Indian middlemen and officials in connection with New Delhi's purchase of 155mm howitzers. The agency concluded the payments had indeed been made by Bofors officials -“either straight to Indian officials, or to middlemen who in turn paid off officials -to secure the $1.2 billion sale of howitzers“.

“Word of the payoffs leaked, sparking domestic difficulties for Indian PM Rajiv Gandhi. Stockholm wanted to save Gandhi the troubles caused him by the Swedish leak, and Nobel Industries wanted to avoid a bribery indictment.The two sides cooperated, therefore, on a scheme to keep details of the payment secret.Stockholm eventually called off the entire bribery investigation,“ the CIA report said. In addition, the report said other incidents may be related to the Bofors scandal. War material inspector Carl Algernon, the customs official responsible for monitoring arms exports, died after being struck by a subway train in January 1987. He had just met (30 minutes earlier) with Anders Carlberg, head of Bofors' parent company Nobel Industries. Algernon was a friend of Bofors directors Claes-Erik Winberg and Martin Ardbo.

The report said the police suspected suicide but murder was a possibility . Media speculation later said Algernon was killed because he threatened to expose the illegal activities of Swedish arms manufacturers. In 1987, media speculated that then PM Olof Palme was assassinated by an Iranian in retaliation to his alleged suspension of an arms shipment to Tehran.

[edit] 2016: India gives Bofors a second chance

Rajat Pandit, Bofors ghost finally buried, 155mm howitzers coming, Nov 17 2016 : The Times of India

Army Will Start Induction From Mid-2017, Deal Worth $737m

The Bofors jinx has finally been broken after 30 years. After the infamous Bofors scandal of the mid-1980s torpedoed all its artillery modernisation plans, the Army will begin inducting its first modern 155mm howitzers from mid-2017 onwards.

Defence ministry sources said in Nov 2016 that the cabinet committee on security , chaired by PM Narendra Modi, has cleared the acquisition of 145 M-777 ultra-light howitzers from the US in a government-to-government deal worth $737 million (almost Rs 5,000 crore).

The M-777 deal, which has a 30% offset clause, will now be inked within the next two to three weeks. “The Pentagon's letter of offer and acceptance (LoA) to India is valid till November 20, but it can be extended for another 10-15 days,“ said a source. TOI had earlier reported that the LoA for the M-777 deal, which the two governments have been negotiating since 2009-2010, had expired once again on November 7.There was a scramble by the two sides after that to extend the LoA's validity.

Interestingly, the M-777 howitzers are manufactured by BAE Systems, which now owns the original Swedish Bofors company .

Of the 145 M-777 howitzers, 120 will be “assembled, integrated and tested“ in India with BAE Systems selecting Mahindra as its business partner here. The first two howitzers will be delivered within six months of the contract being inked, with the others to follow at the rate of two per month.

[edit] 2018: AG advises against CBI appeal

Rajeev Deshpande, January 30, 2018: The Times of India

See graphic:

2018, The AG advised against CBI appeal in the Bofors case

2018, The AG advised against CBI appeal in the Bofors case
From: Rajeev Deshpande, January 30, 2018: The Times of India

In a major setback to efforts to reopen the Bofors payoff case that brought down the Rajiv Gandhi . government in the 1989 election and long remained a political albatross for Congress, attorney general K K Venugopal has advised against the CBI filing a special leave petition in the Supreme Court.

The government’s top law officer said that as more than 12 years had lapsed since the acquittal of key Bofors accused by the Delhi high court, any appeal by the CBI was likely to fail on account of delay itself. He also pointed to lack of circumstances to condone the long delay. After the May 2005 HC ruling, the UPA government and the then AG had decided not to file an appeal against the verdict that acquitted the Hinduja brothers in the Bofors bribery case. The CBI, which had wanted to appeal, “changed” its mind. The UPA was in office till May 2014.

Bofors case revived by pvt persons’ appeal in SC

The Bofors case gathered fresh traction with private persons approaching the SC seeking to file a criminal appeal against the Delhi HC order. The matter was also taken up by the Public Accounts Committee of Parliament which asked the CBI and the department of personnel and training to state its opinion. BJP MPs raised the issue in Parliament as well.

Now, according to documents understood to be with the PAC, AG K K Venugopal has advised, “Any SLP filed before the Supreme Court at this stage, in my view, is likely to be dismissed by the court on account of long delay itself. The record does not reveal any significant events or special circumstances which could be said to constitute sufficient cause for not approaching the SC within the 90 days permitted.”

He said the CBI could still present its views in the petition in the SC but the possibility of a fresh probe was uncertain as the court had noted that a “third party” did not have a locus standi. Venugopal also ticked off the government for not taking a view earlier even after the previous delay. “It is worth noting that the present government has been in position for more than three years now. In the circumstances, the long delay in approaching court will be difficult to satisfactorily explain to court,” he said.

The top law officer did hold out some hope of the CBI making a case for the need or scope for further investigation, noting that the agency was a respondent in the case filed by petitioners Ajay Kumar Aggrawal and Raj Kumar Pandey in the SC. “Thus, the matter is still live, and the opportunity for the CBI to present its case before the SC is not entirely lost,” the AG said.

Venugopal said the CBI canvassing its stand as a respondent would be better than risking filing an SLP on it own as a dismissal would be a loss of face for the agency and result in political embarrassment for the Modi regime. “A dismissal of SLP could well prejudice its stand as a respondent in appeals pending in the SC,” he said.

The investigation into the Bofors scandal was hit by several political and legal roadblocks after a Swedish radio first aired the allegations in 1987. The probe progressed slightly when Congress was replaced by the National Front government in 1989. But Congress’s return to office in 1991 saw the brakes being applied once again. The then foreign minister, Madhavsinh Solanki, was forced to resign after it came to light that he had handed over an unsigned note to Swiss authorities seeking to thwart a probe into payoffs to secret accounts.

When the Atal regime took over, CBI came close to nabbing Italian businessman Ottavio Quattrocchi, who was supposed to be the conduit for the payment of kickbacks, in Malaysia but he took advantage of a weekend when courts were closed to slip out. One of the early decisions of the Manmohan government was to de-freeze Quattrocchi’s UK accounts and let him withdraw 3 million euros and $1 million of the suspected slush funds.

[edit] Bofors PAC finds holes in report filed in 1989

April 26, 2018: The Times of India

The infamous Bofors scandal of the mid-1980s, which brought down the Rajiv Gandhi government, continues to create ripples. A subcommittee of the parliamentary public accounts committee (PAC) has asked the CBI to swiftly probe all ongoing cases related to the Bofors howitzers contract “without fear or favour,” while slamming the defence ministry for its laxity in the entire matter.

The report, which was adopted on by the sub-committee on Wednesday, said action taken notes on five of the nine paragraphs of audit objections in the 1989 CAG report were still pending 28 years after the report was presented to the Parliament. The report will be considered by the full PAC but it is unusual for the report by a sub-committee to be altered or rejected.

“The committee is distraught to note that the MoD showed unparalleled audacity to brazenly admit to failing to trace the files dealing with the subject, which manifests its callousness towards such sensitive matter of public propriety,” said the report, adding that the entire matter was “conveniently kept on the backburner” by the ministry.

The politically-controversial Joint Parliamentary Committee, which examined the contractual aspects of the purchase of the Bofors howitzers and submitted its report in April 1988, concluded that no irregularities could be proven beyond doubt. But the CAG report a year later raised several issues, “the majority of which have not been satisfactorily answered” by the MoD, said the sub-committee.

[edit] 2025

[edit] The unopened boxes

Ritu Sarin, March 4, 2025: The Indian Express

Sometimes, one story can span an entire career or that career can be dominated by one story. That was the case with Chitra Subramaniam and her decade-long investigation into the Bofors bribery scam. The story broke in 1987 via broadcasts of the Swedish state radio and subsequently through Subramaniam’s exposes, first, in The Hindu and later in The Indian Express and The Statesman.

In her upcoming book Bofors Gate (published by Juggernaut), one refrain that runs through as her major regret: the box/boxes with between 500-1,000 pages of secret Swiss documents — sent to India in 1997 — remain unopened.

The documents were handed over to then Central Bureau of Investigation (CBI) Director Joginder Singh at a public ceremony in Bern (Subramaniam was present). It is not clear whether there were one or two boxes.

The book has over a dozen references to the “unopened boxes” with the author writing, “Over the years, politicians have told me that the closed box serves them better than if it was opened. I find these arguments shocking because they strike at the very core of what my country is…I believe the time is not far when the box in India will be opened on public demand.”

Sparking a potential controversy, Subramaniam has written that while the documents were transferred to India in 1997, they remained unopened in 2025. She asserts, “No political party has had the courage to open them for fear of finding out what they contain — not even the National Democratic Alliance (NDA) that rode to power in 2014, on the promise that the corrupt would be booked and that Indian taxpayers would finally know the truth…”

Again: “India’s premier investigative agency pretended the boxes with the secret documents from Switzerland have never been opened to date, and successive governments have used the ‘closed’ boxes as political football without a care for the truth, or for the self-respect of a nation.”

She also describes the boxes as the “elephant in the room” and concludes, “Considering Bofors and corruption made political careers and won elections for the opposition, their inability to look at the documents raises many questions, the most important one being: who gains most from the silence on the documents?’’

And the last, definitive sentence of the book: “The unopened boxes with the CBI contain the self-respect of India.”

The CBI had ploughed through its Bofors case for 21 years and finally closed the case in 2011. While defendants like Win Chadha and Italian businessman Ottavio Quattrocchi and many of the key members of the CBI’s probe team (including then Director Joginder Singh) are no more, others recall that the secret Swiss documents sent to India in 1997 were pivotal to the chargesheet they filed in 1999. 
They, thus, contradict assertions made in the book.

Among those who spoke to The Indian Express was O P Galhotra, who was the Superintendent of Police (SP) assigned to the Bofors case and went on to become the agency’s Joint Director. He said: “I joined the team soon after the documents had been handed over to the CBI and the payments detailed in formed the very basis for filing the charges against Ottavio Quattrocchi and the Hinduja brothers. It was because of the details in the documents, for instance, that the Hindujas joined the investigation in India. The boxes were very much opened.’’

Another key member of the CBI probe team in the Bofors case was N R Wasan, Deputy Inspector General (DIG), who had handled the case for 15 years. He told The Indian Express that after the Director brought them, the boxes were carried to the chamber of the Additional Sessions Judge Ajit Bharihoke in the Tis Hazari Court, opened by the judge and then handed over to the CBI as case property.

He recalled, “The secret documents were a court-to-court transfer between Switzerland and India in 1997 and were therefore addressed to the designated court. The seals were opened in front of the designated judge and then handed over to us for the investigation. The documents were invaluable for the CBI for filing the charge sheets since they contained the entire money trail and every banking transaction.”

When told about this response from CBI investigators, Subramaniam told The Indian Express: “Bofors was not an ordinary case. In India, it brought a Government down and in Switzerland, laws were modified as a result of the investigation. The CBI should have told us what they found and shared the information with us. Why was it all done so quietly?’’