The Bofors scandal was a major corruption scandal in India in the 1980s and 1990s; initiated by Congress politicians and implicating the then Prime Minister Rajiv Gandhi and several others who were accused of receiving kickbacks from Bofors AB for winning a bid to supply India's 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections. It has been speculated that the scale of the scandal was to the tune of Rs. 4000 million.[1] The case came to light during Vishwanath Pratap Singh's tenure as defence minister, and was revealed through investigative journalism by Chitra Subramaniam and N. Ram of the newspapers the Indian Express and The Hindu.[2]
The middleman associated with the scandal was Ottavio Quattrocchi, an Italian businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was reportedly close to the family of Prime Minister Rajiv Gandhi and emerged as a powerful broker in the 1980s between big businesses and the Indian government. While the case was being investigated, Rajiv Gandhi was assassinated on May 21, 1991 for an unrelated cause by the LTTE. In 1997, the Swiss banks released some 500 documents after years of legal battle and the Central Bureau of Investigation (CBI) filed a case against Quattrocchi, Win Chadha, Rajiv Gandhi, the defence secretary S. K. Bhatnagar and a number of others.[3] In the meantime, Win Chadha also died.[4]
Meanwhile February 5, 2004, the Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others,[5] but the case is still being tried on charges of cheating, causing wrongful loss to the government, etc. On May 31, 2005, the High Court of Delhi dismissed the Bofors case allegations against the British business brothers, Shrichand, Gopichand and Prakash Hinduja although charges against others remain.[6]
In December 2005, Mr B. Daat, the additional solicitor general of India, acting on behalf of the Indian Government and the CBI, requested the British Government that two British bank accounts of Ottavio Quattrocchi be unfrozen on the grounds of insufficient evidence to link these accounts to the Bofors payoff. The two accounts, containing € 3 million and $1 million, had been frozen. On January 16, the Indian Supreme Court directed the Indian government to ensure that Ottavio Quattrocchi did not withdraw money from the two bank accounts in London. The CBI, the Indian federal law enforcement agency, on January 23, 2006 admitted that roughly Rs 21 crore, about US $4.6 million, in the two accounts have already been withdrawn by the accused. The British government released the funds later.[7] The deals cost the Government of India an extra 160 crore rupees.[8]
However, on January 16, 2006, CBI claimed in an affidavit filed before the Supreme Court that they were still pursuing extradition orders for Quattrocchi. The Interpol, at the request of the CBI, has a long-standing red corner notice to arrest Quattrocchi.[9] Quattrocchi was detained in Argentina on 6 February 2007, but the news of his detention was released by the CBI only on 23 February. Quattrocchi was released by Argentinian police. However, his passport was impounded and he was not allowed to leave the country.[10]
However, as there was no extradition treaty between India and Argentina, the case was presented in the Argentine Supreme Court. The government of India lost the extradition case as the government of India did not provide a key court order which was the basis of Quattrochi's arrest. In the aftermath, the government did not appeal this decision owing delays in securing an official English translation of the court's decision.[11]
A Delhi court provided temporary relief for Quattrocchi from the case, for lack of sufficient evidence against him, on 4 March 2011.[12] However the case is still going on.
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