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29 Sep 2017

CBI: 'UPA government could've continued freezing Quattrocchi's account but didn't'

Recently, the CBI revealed to the Parliamentary Accounts Committee (PAC) that the UPA government could have frozen the UK bank accounts of Bofors accused Ottavio Quattrocchi even after inquiry was stalled in 2006 by declaring him a proclaimed offender, but they refused to do so.

Instead, they allegedly wanted him to have access to these accounts.

But, why? Let's know more.

In context

UPA let Bofors-accused Quattrocchi access his funds


What is the Bofors scandal?

In March 1986, India signed a Rs. 1430cr deal with AB Bofors, a Swedish arms manufacturer, for 400 155mm Howitzer guns for the army.

However, in 1987, Swedish Radio alleged that the company had bribed Indian politicians to secure the deal.

This scandal shook Rajiv Gandhi-led government and CBI filed an FIR against Win Chadda, Hinduja brothers, Quattrocchi among others for being the alleged middlemen.


What was Ottavio Quattrocchi's involvement in the scandal?

Quattrocchi wielded clout in Delhi since 1964, often having access to information sent to PMO.

AE Services, Quattrocchi's shell company, entered the Bofors deal late, in Nov'85.

Bofors, at that time, was negotiating with Chadha and Hindujas.

Bofors' contract of commission with Quattrocchi was only if their deal with India was signed before March'86.

Quattrocchi's clout made this possible, earning him a commission.

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CBI charge sheets  Quattrocchi in Bofors scandal


CBI charge sheets Quattrocchi in Bofors scandal

A joint parliamentary committee to probe Bofors was set up in 1987 itself.

The Rajiv Gandhi-led Congress government lost 1989 LS elections due to the committee's report.

In 1990, CBI registered a case, and in 1997, the Swiss bank released account details after a long legal battle.

In 1999, CBI charge sheeted Quattrocchi and others and established that Bofors paid commission to them.

Failed Extradition

India's efforts to extradite Quattrocchi

Following the charge sheet, a non-bailable warrant was issued against Quattrocchi.

In 2000, the government requested Malaysia, where he was residing then, to extradite him.

Though there was no extradition treaty, he was arrested and later let off on bail.

Malaysian courts rejected Indian plea as allegations were vague and there was no specific offence listed to indict him.

Meanwhile, UK freezes Quattrocchi's bank accounts in 2003

In 2003, Interpol alerted the CBI that in two bank accounts held by Quattrocchi and his wife Maria, funds worth Rs. 21cr had been transferred from a Bahamas account. CBI reacted swiftly to this information and asked them to freeze the accounts.


Extradition fails and CBI does a volte-face in 2004

After extradition with Malaysia failed, Quattrocchi fled to Milan.

In 2004, SC exonerated all public servants involved in Bofors.

Subsequently, with the UPA coming to power in 2004, CBI did a flip-flop and B. Datta, additional solicitor general of India, on their behalf argued for de-freezing Quattrocchi accounts.

UK's Crown Prosecution Service (CPS) suggested various steps to continue the freezing of accounts.


UPA could have stopped access of funds but resisted

After Datta rejected CPS' suggestion, on 13 Jan'06, the accounts were de-frozen.

Subsequently, on 16 Jan'06, SC ordered a status quo regarding the accounts, but money was withdrawn that very day.

Datta argued that no substantial proof existed that these accounts held the Bofors commission and extradition of Quattrocchi had repeatedly failed.

Quattrocchi could thus access funds because UPA resisted from acting.

Meanwhile, of the others Bofors accused, none have been tried

Apart from Quattrocchi, who died in 2013 and was not booked, others like Chadha and Martin Ardbo, Bofors AB's CEO, died before trial and Hindujas' charges were dismissed because of their alleged closeness to BJP. Thus, none accused in Bofors have been brought to justice.

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