Scrap Scorpene deal, NDA tells govt

The National Democratic Alliance (NDA) today demanded scrapping of the Rs 8,000 crore Scorpene deal between India and a French firm, alleging payment of bribe amounting to more than Rs 500 crore.

The alliance asked the government to set up a commission of inquiry headed by a retired judge of the Supreme Court to investigate the deal and sought immediate arrest of middlemen, a probe into their links with the Congress and information on the identity and role of foreigners involved in the Navy War Room leak.

Prime Minister Manmohan Singh refused to comment on the NDA allegations.

Repeating in part the charges made by a magazine that top Congress politicians, Chief of Naval Staff Admiral Arun Prakash and foreigners were involved in the deal, signed last year, the NDA claimed it had done its own homework as well.

It charged that in October 2005, after the Scorpene deal had been cleared, an entity called the Thales Charitable Trust registered at Surrey in the UK transferred $50 million in two instalments from its account in Zurich to an account in Liechtenstein.

According to the NDA, this account belonged to a middleman, Abhishek Verma. The alliance has a letter from the bank identifying Verma as the holder of this account. The same account was cited by the Enforcement Directorate, which has a case pending against Verma.

According to the NDA, of the $50 million deposited in Verma's account, $25 million was further transferred to the Gruber Research Foundation, based in Switzerland.

"Does the Gruber Research Foundation have any links to a political party in India," asked former defence and foreign minister Jaswant Singh who held a press conference along with leader of the Opposition in the Lok Sabha LK Advani and NDA convenor George Fernandes.

However, rejecting suggestions of any wrongdoing in the deal, Defence Minister Pranab Mukherjee said action would be taken against parties to the deal if there was any violation of the agreement, like involvement of middlemen. He would make a comprehensive statement in Parliament on the issue tomorrow, he told reporters.

Describing the charges as "unsubstantiated", Mukherjee said the deal between Mazagaon Docks and MS Armaris and MS MBDA was governed by an "integrity pact" clause which was signed by the two sides. If it was found that middlemen were involved, not only would the contract be cancelled, but the companies involved would also be made to pay a heavy penalty, he said.