Bofors: The Deal That Spelt Defeat for Rajiv Gandhi

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Rajiv Gandhi began his political career as ‘Mr Clean’ but this image was shattered by the end of his term in office. Allegations of corruption first surfaced in April 1987, when kickbacks in government deals were linked to Rajiv.

V P Singh | Tribune India
V P Singh | Tribune India

Problems started when his Finance Minister V P Singh conducted a series of inquiries and raids into alleged forex violations of industrialists and other prominent people known to Rajiv. Some were his close friends. Rajiv moved Singh to the Defence Ministry.

HDW submarine | Wikimedia Commons
HDW submarine | Wikimedia Commons

But in April 1987, the Indian Embassy in Bonn sent a letter to Singh informing him that a Rs 30-crore bribe had been paid to middlemen during the purchase of HDW submarines. Singh ordered an inquiry and resigned from the Cabinet in protest.

The same month, a Swedish radio broadcast claimed that kickbacks had been paid in the deal to purchase Bofors guns for the Indian army. This time, the kickbacks were double the amount.

Rajiv told Parliament that neither were middlemen nor bribes involved in the Bofors deal but two of India’s leading newspapers published a series of reports showing that middlemen had indeed benefited from the deal. They had called Rajiv’s bluff.

A Joint Parliamentary Committee was set up to investigate the Bofors deal but the Opposition alleged a cover-up as it was packed with Congress members. The JPC gave a clean chit to the government but the Opposition kept up its pressure on Rajiv’s government.

Rajiv Gandhi | Wikimedia Commons
Rajiv Gandhi | Wikimedia Commons

In 1987, diary entries of Bofors chief, A B Martin Arbdo, became public and they revealed the names of people allegedly linked to the Bofors scam. They alluded to industrialist G P Hinduja, Congress politician Arun Nehru, middleman Ottavio Quattrocchi and Rajiv Gandhi himself.

A report by the Swedish Audit Bureau confirmed that Bofors had deposited Rs 64 crore in bank accounts linked to the Hinduja brothers, Win Chadha, the Bofors’ agent in India, and a shell company operated by Quattrocchi in a tax haven.

Eventually, Bofors led to Rajiv Gandhi’s defeat in the 1989 general election. It’s an epithet that refuses to shake free from the reputation of a politician once regarded as ‘Mr Clean’.

Cover Image: Wikimedia Commons

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