IDC Analysis of the TEHELKA Exposures

New Delhi, 28 March 2001

Commissions being paid in Defence deals are a world-wide phenomenon.  IDC has therefore watched with rapt attention the tapes aired on Zee TV. Between ourselves we pretend to have 90 years of Defence experience and having kept our ears and eyes open, the tapes only confirmed what almost everybody in Defence already knew –– that there are Agents and there are touts in the Defence Business and commissions are paid. K Subrahmanyam in his piece in the TOI on 26th March, very aptly explained that people in positions of power to influence decisions on Defence procurement, have been on the take for the last thirty years. 

A decade ago the military people were content to get a Calendar and a Pen and the odd bottle they looked forward to. They may now have progressed to receiving a few thousand chips and Blue Label, but what has to be understood is that they could not change or influence a major decision. Some like Gen Sundarji to gain favour perhaps, merely adhered to the Government line to recommend Bofors as opposed to the French SOFEMA. Others may have passed on information, which was on files and Maj Gen KSK Choudhary's statement on the Tehelka tapes was that as DG WE "I cannot influence the decision".

The top Agents and names like Chaudharys, Khannas, Guptas and Nandas (legal and illegal since Rajiv banned them all but now mentioned in the Tehelka tapes) and other names IDC is aware of but without any evidence, employed retired service officers to ferret out information, while they played the bigger money game and all top foreign companies know more details about defence deals than we Indians do. These Agents need to be legalized for more transparency so that everything is in the open.

K Subrahmanyam known to be the best theoretician in Defence has always analysed issues the best, but in the past he has totally missed out to recommend that Agents should be legalised. In India it is no wonder we have Planning Commissions with senior people in charge but no implementation commissions. That all politicians take  commissions as donations is now common knowledge by acknowledgements on TV.   There should be self-imposed limits, as big deals are all with the Government.

It is well recognised that there has been secrecy and skullduggery in arms deals and that it will be difficult to eradicate this especially in the third world. As long as professional militaries like ours get what they need, and the political parties take a few cuts, the world will not come to any grief.  Spreading and investing Money in the arms bazaar is the norm, and even Singapore succumbed to Bofors’ inducements and it made big news. It is when the limits are exceeded, and the military does not get what they need, and touts proliferate and become more powerful, that sleazy Defence Agents influence decisions. Skullduggery increases and that is what has happened in India. IDC offers some analysis on the bigger deals.

Advanced Jet Trainer (AJT)

Asian Age has just explained that the Hindujas were the Bae’s go betweens for the AJT Hawk deal. They learned their trade dealing with the Shah of Iran and in fact the HDW Submarines India got were originally destined for Iran. Here IDC would like to juxtapose the earlier article of former Air Chief SK Sareen in Indian Express with the revelations of R K Jain on the Tehelka tapes regarding AJT. Sareen explains how the IAF had selected the British Hawk and French Alpha Jet long ago. These planes could have been bought ten years ago at £ 5 million a piece, but how some other parties were deliberately brought in to put the entire deal into a "sleep mode". Now the nation is at ransom to pay £ 19 million per piece for the HAWKs and they now look as unlikely as before. The Congress is yelling blue murder and from Tehelka tapes it seems that the PM has not been too involved in Defence deals.  AJT has thus become the Annual Joke Trainer as one joker put it.

On the other hand the twin-seater Alpha Jets, which are readily available at a drastically cheaper price would appear to be a more appropriate choice. But we thank Jain for his insides and can see that the AJT deal, so direly needed by the young IAF Pilots is going to be derailed yet again unless the Government shows some guts as the money is already budgeted. It is the need of the hour according to Sareen, if lives are not to be lost.

Now we also know that Jaya Jaitley and George Fernandes gave permission to R K Jain to go to Moscow to sign the MiG Agency deal and they must confirm or deny this.


The order for 87 Armoured Recovery Vehicles (ARVs) went to POLAND and IDC has seen shipping documents consigning them to BHEL some months ago. It was surprising. Now Tehelka tapes say  Nanda tried to push for the Slovak ARVs but failed, and yet coughed up. There has been no denial so far.  IDC knows that the big players acting for foreign Military/Industrial Complexes and such Principals distribute money and some times cover two countries through multiple Agents.  Israel lets two firms compete hoping one gets the order.  

Earlier IDC had read Rahul Bedi  (Janes’ correspondent) in one of his articles in Asian Age that PSUs were now being chosen as the conduits for defence suppliers, to make deals look clean. At that time we did not know what he was getting at but Janes gets fed inside information from competing parties, more the reason to legalise Agents. So far the OTO MELARA deal done years ago by BHEL who had no clue about guns has not come up. The whole business of defence deals in the developing world is intriguing. Years ago HMT with Mr Ghosh (later with BALCO) had become Defence Agents and wasted HMT money on some deals.

On Barak  the Navy definitely needed the SAM missile system as the present CNS has explained, but it appears that seven systems have been pushed through  in a real hurry and some one seems to have made some gravy . IDC had reported the missile system is installed on INS Viraat (as seen during the IFR) but the full system is not yet operational as two separate suppliers are involved Rafdael and IAI.


IDC wonders why collaboration to make TRISHUL successfully with a country like Israel was not pursued since millions are being spent on it in any case.  In fact all our DRDO projects can become operational if they collaborate with leading foreign companies. It is the finishing of a house that takes experience and time. Our LCA Project, Missile Systems, PINAKA, ARJUN and ALH all need finishing and collaboration with foreign experienced firms may be the answer and we can export the products as Ford IKON has shown. There was a scandal on the Cassapir vehicles imported from South Africa as being second hand and not new and now we read some Army officers have improved the engines locally. Asian Age has raised the issue that the 10 Mirage 2000H ordered are second hand and IDC has not read any clarification otherwise. If there was a legal Agent we could ask him but an Agent there must be!

Secretaries and Treasurers As Conduits

IDC learnt that the powerful Rajiv Guaba Secretary to RM got involved in PNCs as per the tapes.  Another name Satyamurti PS to Bangaru Laxman was privy to knowledge of transactions and one Rajiv Tomar's (?) name came up.  Names of Companies came up  Corentti, Quotrain, SG, Boomer, so the tapes are genuine as far as bragging by R K Jain and Gupta and others depict again and again. Again Rahul Bedi had written on the SOLTAM deal to upgrade Army 130s to 155 mm, which these people knew about and many service officers are unaware because of secrecy. 

With this background and what we saw Jaya Jaitley had to say, it is difficult to believe George Fernandes did not know all this. It is a bit far-fetched as he is the cleverest of all RMs. He had been to Siachen 18 times. IDC recalls that a Commanding Officer who liked to mix with the sailors on his ship, was once told by his No. 1 (Second in Command)  "Sir you are mixing with the sailors too often, that is my job not yours." The CO took it well and later became a Flag Officer. Going to Siachen 18 times makes you popular with the troops but not necessarily a good RM.  The crux is what Tehelka conveyed in what it said to Bangaru Laxman  "Sir if there is 25% chance we are willing take the risk". 

Finally IDC is developing a sneaking admiration for George Fernandes and sympathy for Vajpayee. If George ditches the NDA, the Government is in trouble so Vajpayee has appointed a make shift Defence Minister in Jaswant Singh, for if he appointed a permanent one, which the Services need at the moment, then the promise given to George  that he would return to Defence would be  meaningless.

This is India's Karma and the GoM recommendations lie with the PMO. TOI calls India
a Presidential System of Governance where the Cabinet looks to the PM and his powerful PMO for all decision making.

On 7 Dec IDC had posted a study on the PMO and how it works and we were delighted to see that post Tehelka the whole nation including Bal Thakeray is talking about the PMO. IDC did it long ago because we are dedicated to see that India's fine Armed Forces are never let down and this is our supportive analysis. Lets set the house in order as Dr Manmohan Singh set our economy on a growth path. An honest and dedicated Defence Minister can do that if he just heeds the professionals in and out of service --- the people in the services are the best. Jai Hind.

Now we leave it to the Army Court of Inquiry and Justice Venkataswami to go into l’affaire Tehelka, but suggest that the first step is to streamline the procurement system and legalise Agents.  It is heartening to know Mr. BG Varghese has been appointed to assist the Army to deal with transparency aspects of the huge Military.

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