The Indian Analyst
 

NEWS ANALYSIS

The Denel charge

 
The Congress suspects South African firm Denel and former Defence Minister George Fernandes shared a cosy understanding, but past experience tells us little will come out of this 'scandal' for years and years

What is India News Service
24 April  2005

The newest defence allegation to hit the Indian media concerns the South African manufacturer Denel.

Defence Minister Pranab Mukherjee has sought information on a deal his predecessor George Fernandes struck with Denel.

Mukherjee said he had sought details of the contract and the negotiations to buy anti-materiel guns from Denel even as the National Democratic Alliance rallied to Fernandes’s defence in Parliament.

Among the other defence deals that generated heat (but little light) are what are now known as the Tehelka and Bofors scandals, the first named after the website that exposed some black sheep in the army and forced the then defence minister to resign, and the latter after the Swedish company which allegedly paid kickbacks to Rajiv Gandhi, who was the prime minister in the early 1980s.

The BJP and its NDA allies have predictably accused the Congress of misusing the Central Bureau of Investigation to settle scores with rivals, and questioned the Government’s move to refer the Denel gun deal to the investigating agency without so much as registering an FIR.

Former Law Minister and BJP general secretary Arun Jaitley said the investigation can only begin after the filing of an FIR. He maintained that an offence can only said to have been committed if kick-backs were received, either by public servants or some third party at the behest of public servants.

Jaitley claimed the reference was made by the Government to deflect attention from the Phukan Commission report, which has given a clean chit to former defence minister George Fernandes.

One thing is clear from these charges and counter charges: India’s political class does not mind making seriously damaging political charges on issues even as sensitive as defence and security.

The CBI hasn’t been completely above suspicion, and has had to face allegations of political partisanship. Jaitley listed several instances of alleged CBI misuse — failure to go in appeal against the ‘‘erroneous judgment’’ in the Bofors case, refusal of sanction to prosecute former minister Satish Sharma, failure to appeal against a special judge order discharging JMM leader Shibu Soren in a disproportionate assets case and change of prosecutor in another disproportionate assets case against RJD leader Laloo Prasad Yadav.

Fernandes said: ‘‘When the Army officers will have to appear before the CBI, it would demoralise them. Those who are illiterate on matters of security and defence of the country, and those who have an agenda of their own, weaken the nation’s security and will demoralise the Armed Forces.’’

About the CAG report, authored by V.K. Shunglu, which widely criticises the nature of Operation Vijay procurements, Fernandes said, ‘‘His point is that he knows better than the Armed Forces what they need, when and from where and how much they should procure it.’’

‘‘No Raksha Mantri (Defence Minister) can refuse the demand for arms by the Army,’’ he said and charged Congress president Sonia Gandhi with ‘‘spreading lies’’ about defence procurements. ‘‘The Congress has been demoralising the Armed Forces for years, especially the Congress president has been spreading lies at every given opportunity.’’

Fernandes has a long history of anti-Congress politics, inspired first by Lohia and then the Bihar leader Jayaprakash Narayan, and believes he is being victimized for his opposition to the Gandhi-Nehru dynasty.

If the Bofors howitzer made the Rajiv Gandhi government 'scoot' in the 1989 elections, the Congress hopes the Denel anti-material rifles will 'backfire' in the faces of George Fernandes and his allies.

The Army, ironically enough, is quite satisfied with both the weapon systems. While the Bofors gun proved its mettle in the 1999 Kargil conflict, the force was keen to induct 900 more anti-material rifles from Denel - after acquiring 300 such rifles since December 1999 - for their "potent bunker-bursting" capabilities.

But the still-erupting scandal of Denel allegedly paying money to British firm Varas Associates to influence the tender for supplying the rifles to India, during Fernandes' reign as the defence minister, has waylaid all their plans.

After freezing all ongoing negotiations with Denel, defence minister Pranab Mukherjee now apparently wants the CBI to ascertain whether Fernandes and the state-owned South African firm enjoyed a cosy relationship.

A pointer to this, of course, is the previous NDA regime's go-ahead to Denel's participation in the Nalanda factory project to manufacture propellant charges for heavy-calibre artillery ammunition.

And guess who was Denel's main competitor in the Nalanda project: SWS (Swedish Weapon Systems) Defence, the new incarnation of the original Bofors company!

The fallout of the controversy is that army supplies will slow down. Denel has already supplied 300 guns, and 300 more in the pipeline will remain frozen now.

According to the arms procurement rules of the Defence Ministry, purchases can be made only through the company, and no middlemen are allowed. Denel allegedly paid a commission to a British firm to win business worldwide. Denel reportedly paid a 12.75 per cent commission to Varas Associates “to influence India’s decision to choose it as the supplier”.

Interestingly, Denel told the Mail & Guardian it had received no communication from the Indian government, but the reports cloud a positive announcement from Denel that it has been awarded a R210-million contract to supply high-technology pilot helmet tracking systems for the European fighter market.

The doubt cast over the Indian deal will add to the headaches of incoming Denel CEO Sean Liebenberg, who has been brought in by Minister of Public Enterprises Alec Erwin to turn around the ailing parastatal.

South Africa’s Saturday Star quoted a Denel source as alleging the agent had supplied secret records of an Indian price negotiation committee, which could have assisted Denel to set an attractive price
.

From the Swedish howitzer company Bofors to the South African firm Denel, it is the same story - allegations of slush money lubricating Indian defence deals leading to furious debates in parliament and articles and bitter exchanges in the print and electronic media, but ultimately to no avail. It's all sound and fury without a substantial end result.

Already, the Swedish government has informed India that a time bar has made it close the Bofors investigations. No one can say what the fate of the latest round of probes into as many as 37 defence deals will be, but it can be safely predicted that it will take at least five years before any definite conclusion is reached.

In some cases, of course, even if the guilty are neither identified nor incarcerated, a political punishment is nevertheless meted out to the perceived wrong doers. For instance, the fall of Rajiv Gandhi's government in 1989 was a direct result of the Bofors scandal.

Similarly, even if no one has yet felt the heavy hand of the authorities, except a few army personnel as a result of a sting operation carried by the Tehelka website, several charges of corruption have been hanging for quite some time over George Fernandes, the defence minister in the Atal BIhari Vajpayee government. Fernandes had to resign after the Tehelka disclosures.

If taints of this nature haunt the Indian politicians, the reason is that their reputation for honesty has taken such a beating in recent years that the average person is ready to believe virtually whatever is alleged. After all, India has been placed in the 83rd position out of 133 countries in Transparency International's corruption index. As a result, the political fallout from such charges is so advantageous for their opponents that the latter do not mind the cases dragging on for years, thereby leaving almost a permanent scar on the accused person's name.

Rajiv Gandhi's name, for instance, has been irretrievably damaged by Bofors although nothing has been proved against him. Similarly, the unflattering sobriquet of 'Coffin Gate' is bound to haunt Fernandes in the years to come in the context of the emergency purchases of aluminium caskets for dead soldiers during the Kargil conflict in 1999.

While it would be unrealistic to expect political parties to let go of any opportunity that lets them score a point over their rivals, are we asking for the moon when we say they should think twice before they talk wild on defence and security matters? It does not take a very complex strategist to understand that affected defence supplies would directly mean that our aggressive neighbours gain an upper hand, and our security seriously compromised.