Geography Reference
In-Depth Information
In October 2006, the government-controlled CBI raided 35 agents' premises in Delhi
and other cities over a $269m contract placed with Israeli Aircraft Industries for Barak mis-
sile systems during the previous BJP-led coalition government. It subsequently registered
cases against George Fernandes, the coalition's defence minister and leader of the small
north Indian Samata Party. Also charged were Jaya Jaitley, a close friend of Fernandes and
a former Samata president, and Admiral Sushil Kumar, a retired chief of naval staff. The
CBI alleged that payments included Rs 20m had been given to Jaitley, and that the admiral
had 'colluded' by favouring the Barak in preference to the Trishul missile system that was
then being developed by the DRDO. The Indian navy was content with the Israeli missiles,
and in January 2006 a $350m deal was struck for the DRDO and Israel jointly to develop a
long-range Barak air defence system for use by the two countries' navies.
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'In addition to long-existing networks with names like Khanna, Nanda and Choudhrie,
foreign agents have flourished for decades, fattening on the capital city's cocktail circuit in
apparent disregard of visa regulations or immigration controls,' says Ajai Shukla, a former
be named) operate quite openly in India, it could legitimately be asked why the government
has never taken action against them. The answer, according to a top government official, is
that “MoD officials, and even political parties, do not want to stop the flow of funds that
comes from these people. This is a gravy train and the money is distributed widely … to
individuals as well as to political parties across the spectrum”.'
Shukla also mentioned 'two expatriates, Swiss-American citizen, Guido Haschke, and
British citizen, Christian Michel' who had been 'named by Italian prosecutors as key play-
ers in bribing Indian officials on the Augusta-Westland helicopter deal. 'Christian Michel,
who runs Panama-registered Keyser Incorporated, has never bothered to hide his profes-
sion,' wrote Shukla. 'In 2004, he actually sued French aviation company, Dassault, for fail-
ing to pay him commission in New Delhi's Euro 350m purchase of ten Mirage-2000 fight-
ers in the year 2000. The French court threw out his lawsuit, ruling that his agreement with
Dassault had expired two years before the deal was concluded'.
Blacklisting
Corruption allegations have led to long lists of foreign companies being blacklisted, some-
times in the middle of contracts, which has seriously undermined the modernization of the
armed forces for many years. Manufacture of Germany's HDW submarines and delivery of
Sweden's Bofors' howitzer guns and ammunition were hit after corruption scandals in the
1980s. South Africa's Denel company was blacklisted in 2005 when it was supplying tech-
nology for howitzer ammunition after it was discovered it had paid UK-based agents on an
