Barak deal: George charged by CBI

The CBI files FIR for alleged anomaly in the purchase of the missile system from Israel, writes Archis Mohan.

india Updated: Oct 14, 2006 16:04 IST

The Central Bureau of Investigation (CBI) has charged former defence minister George Fernandes with corruption in a case related to alleged irregularities in the Barak missile deal of 2000. The investigative agency is also following the trail of three more defence deals signed during his tenure as defence minister.

In an FIR on the Barak deal submitted before a designated court on Monday, the CBI also named as accused politician and Fernandes's confidante Jaya Jaitly, former chief of navy Admiral Sushil Kumar and the then treasurer of the Samata Party R.K. Jain.

“We have evidence that Rs 2 crore was paid to the then president of the political party who functioned from the residence of the defence minister. Several lakhs were paid to the party's treasurer,” said CBI spokesman G. Mohanty, referring to Jaitly and Jain respectively.

Mohanty said Fernandes went ahead with the Barak deal — for seven anti-missile systems and 200 missiles — despite opposition from the Defence Research and Development Organisation. The CBI spokesman said Fernandes tried to get the proposal approved by the Cabinet Committee on Security despite objections from the defence secretary. According to the FIR, Sushil Kumar colluded in this.

In the Barak deal, the proposal was processed on a single-tender basis. “The negotiated note of $268.63 million (Rs 1,125 crore) was more than the earlier quoted rate by about Rs 71 crore,” said Mohanty.

A livid Fernandes dismissed the charges as baseless and blamed President A.P.J. Abdul Kalam for the Barak deal. He said he was following the advice of Kalam, who was then scientific adviser to the prime minister. Said Fernandes: “So far as Barak is concerned, if they have to make any charge, then it should start with the president who first called for it (the missile system), asked for it before I joined the government. He (Kalam) said this was needed and that was how it came.”

According to Fernandes, the decision to purchase the missiles had been taken before he took over as the defence minister and he was only fulfilling the needs of the navy.

"I took the advice of the present president and the then adviser to prime minister A.P.J. Abdul Kalam.... On his clearance, it was done."

The president’s press secreatry, S.M. Khan, refused to comment on the statement.

Fernandes also lashed out against Congress president Sonia Gandhi, who, he said conspired to get the FIR filed against him. "This is the handiwork of that lady," he said,

While the Barak deal has again backfired on the 76-year-old Fernandes — he had to resign as defence minister in March 2001 after Tehelka website carried out a sting operation that exposed alleged irregularities in the deal with Israel — this time the CBI has registered two more cases on deals signed during his tenure. One refers to the Rs 151-crore deal with Russia's Krasnopol for the purchase of terminally guided ammunition (TGM), and the other to the Rs 300-crore deal with PSB Bohemia for armoured recovery vehicle (ARV).

That is not all. The CBI has also revived its investigation into alleged corruption in the purchase of Rs 220 crore worth anti-material rifles from South African firm Denel.

"The three new FIRs are part of the 48 matters referred by the Ministry of Defence to the CBI between December 2004 and August 2005. Of these, 24 relate to the Tehelka expose. The CAG audit had pointed to irregularities in 25 matters relating to Operation Vijay (Kargil conflict)," said Mohanty.

In connection with the four defence deals, the CBI raided 35 places in Delhi, Mumbai, Chandigarh, Bangalore and Sangrur. It raided the homes and offices of Congress MLA from Sangrur and arms manufacturer Arvind Khanna and his father Vipin Khanna (both in connection with Denel case); arms dealer M.S. Sahni, Major (retd) S.J. Singh and Lieutenant-Colonel (retired) V.K. Beri (Krasnopol case); arms dealer Suresh Nanda, son of admiral (retired) S. Nanda, (ARV and Barak deals); and arms dealer Sudhir Chaudhary (Barak). A CBI team seized Rs 62.5 lakh as unaccounted money from Nanda's office at the Claridges Hotel and Rs 48 lakh from Sahni's Vasant Vihar home.

The CBI said the money given to Jaitly and Jain was routed through Suresh Nanda and two other middlemen.

On the ARV deal, the CBI said the lowest bid was ignored "at the behest of middleman" and it led to a loss of Rs 51.83 crore to the exchequer". On the Krasnopol deal, Mohanty said, "The contract was awarded though TGMs failed most tests." On the Denel deal, the CBI said agents received payment to help clinch the deal. Later, Arvind Khanna denied involvement in the Denel deal.

First Published: Oct 14, 2006 16:04 IST