CBI perpetuated fraud in Bofors pay-off case: Jaitley

Monday, January 3, 2011

NEW DELHI - Accusing the Central Bureau of Investigation (CBI) of perpetuating a fraud in the Bofors gun deal pay-off case, senior Bharatiya Janata Party (BJP) leader Arun Jaitley Monday said that an Income Tax Appellate Tribunal order has confirmed the payment of kickbacks. He also sought a fresh probe in the case.

The government policy was not to pay kickbacks. Kickbacks were paid, particularly to A.E. Services. The history of all the people involved was traced out… How A.E. Services had a deal with (Italian businessman Ottavio) Quattrocchi. How was he brought in, how there was need of tax payment on all these transactions,” said Jaitely while talking to reporters here.

He said the case in the tribunal related to income tax responsibility of Dubai-based businessman Win Chadha, who died a decade ago, in the commission received in the 155 mm Bofors Howitzer guns’ sale to India in 1986.

Jaitley said a strange situation had been created where the CBI took a position that no bribes were paid and closed the pay-off case while the revenue authority of the government through the highest appellate tribunal said that kickbacks have been paid and income tax was payable.

So, clearly, the entire fraud (that) has been perpetuated by the CBI at the behest of its political masters in the Congress and stands unravelled, he said.

“How can this country have a situation where the criminal investigative agency says there are no kickbacks. And the highest revenue agency says taxes are payable on these kickbacks?” he said.

“They didn’t file appeals against unlawful orders, they got the accounts defrozen. This was not merely a case of bribery. It is now established by this judicial order. Bribery was accompanied by a huge cover-up operation which has almost lasted two and half decades,” he said.

“Nobody has still answered the question which this order raises - in 1986 why was Quattrocchi paid this money,” he said.

Calling it discovery of truth by default, Jaitley hit out at Congress president Sonia Gandhi and Prime Minister Manmohan Singh on the issue of corruption.

Referring to the five-point agenda outlined by Gandhi at the Congress party plenary last month to fight corruption, he said only one-point agenda was needed.

You only need one-point agenda. Send the guilty to jail. Dont cover up, he said.

Hitting out at the CBI, Jaitley said the criminal investigation into Bofors gun deal kickbacks should be re-opened and the probe should be given to a special investigation team.

After this judicial order, the CBI has nowhere to hide its face, Jaitley said.

“The investigations revealed that an amount of 242.62 million Swedish kroners (Rs.412.5 million) was paid by M/s. AB Bofors, as commission, to Quattrocchi and Chadha through M/s. A.E. Services and M/s. Svenska, in contravention of the policy of the government of India not to allow middlemen/agents in the deal,” the tribunal said in its 98-page order dated Dec 31, 2010.

The order, delivered by judicial member R.P. Tolani and accountant member R.C. Sharma of the Income Tax tribunal, was made available here Monday.

“Bofors acted in violation of the Indian defence policies and rules and harmed the public exchequer, besides committing breach of propriety,” the tribunal order said.

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