CBI probe into defence deals with S African firm

Former Defence Minister George Fernandes seems to be heading towards trouble with the United Progressive Alliance (UPA) government today handing over all files pertaining to dealings with the South African state-owned armament major, Denel, during his tenure to the Central Bureau of Investigation (CBI) for preliminary investigations.

"The preliminary probe is on to examine all dealings of the company with India to find out what went wrong," Defence Minister Pranab Mukherjee said.

All contracts with the South African firm reached by the previous National Democratic Alliance government had been "put on hold" till initial examination was completed, the defence minister said.

After the preliminary probe, the government would consider what kind of an inquiry should be conducted, Mukherjee said and indicated that the CBI would be handed over the cases as these pertained to dealings with foreign suppliers.

He said under the agreement reached by the previous regime, the company was to supply a large number of bunker-buster anti-material rifles. Denel had already supplied 300 guns and some being in the pipeline would remain frozen now, he added.

Mukherjee's remarks came as the issue of alleged payoffs by the South African armament manufacturer cropped up in both Parliament yesterday with treasury benches making a vociferous demand for handing over the case to the CBI.

While asserting that the supply of these rifles was "frozen", Mukherjee said the freeze would also apply to Denel's technology transfer project at Nalanda in Bihar, Fernandes' parliamentary constituency, to produce advanced illuminated artillery and tank shells for the army.

In the Lok Sabha, the entire ruling alliance including the Congress and the Left parties demanded that the alleged payoffs in the defence deal with a South African arms manufacturer be probed into.

Rahul Gandhi along with other MPs demanded a probe in the issues that the Bharatiya Janata Party (BJP) was not at all interested in pursuing. In fact, at the meeting of the business advisory committee the BJP tried to block the government from raising this matter in Parliament.

Documents were circulating in Parliament all day today, released from the office of a top United Progressive Alliance (UPA) minister, giving reporters the background of the deal.

On the floor of the House, the government was equally proactive with Minister of State for Parliamentary Affairs Suresh Pachouri telling the Rajya Sabha that the government was committed to examining the issue thoroughly. He said this as UPA members demanded an investigation into media reports of alleged payoffs in the rifle deal.

"I am not in a position to say which agency will look into the matter but the government is taking the matter seriously", Pachouri said when Rashtriya Janata Dal (RJD) and Left MPs demanded to know which agency would probe into the matter.

The issue of alleged payoffs in the rifle deal was raised by RJD member Ramdeo Bhandary during zero hour in the Rajya Sabha. In the course of heated exchanges, Congress members said the faces behind Varas Associates, a British Isles-based company which had acted as a front for the South African company, had been identified.

Terming as "shady" the happenings in the defence ministry during the stewardship of Fernandes, Bhandary said $333,720 had passed hands as commission in the deal.

"Who are the beneficiaries" of the 13 per cent commission paid, he wanted to know from the government. If the then defence minister was not responsible, who else could be, he asked and said the guilty should be punished and put behind bars.

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Rifle deal gets murky

THE DEMAND:

UPA members seek a probe into the alleged payoffs in a defence deal with Denel, a South African arms manufacturer

$333,720 had passed hands as commission in the rifle deal, alleged Ramdeo Bhandary (RJD)

THE RESPONSE:

The preliminary probe was on to examine all dealings of the company with India to find out what went wrong, Defence Minister Pranab Mukherjee said

All contracts with the South African firm signed by the NDA government had been put on hold