May 4, 1998

By Harish Gupta

Like any good Sicilian, Ottavio Quattrocchi is a cautious man -- unhurried, deliberate and not prone to impulsive action. So when the former Delhi representative of Snamprogetti, the Italian fertiliser and petro-sector company, recently moved a petition before the Delhi High Court seeking the revocation of a non-bailable warrant (NBW) issued against him, it was clear he was worried. And desperate.

Following the issuance of the NBW and the subsequent Interpol red alert, Quattrocchi is a hunted man. He could be arrested at the airports of any country which is a signatory to the Interpol treaty. As his lawyer, Dinesh Mathur, puts it, Quattrocchi has faced "great difficulty in his travel to certain countries which have refused to grant him a visa. This has affected his right to freely move about for his business purposes".

Not since the night of July 30, 1993, when he surreptitiously boarded a Lufthansa flight to Milan and skulked away from the country where he had made his fortune, had Quattrocchi bothered about the law agencies in Delhi. Instead, he had moved to Kuala Lumpur in the hope that the controversy over his role in the infamous Bofors gun deal would die away -- and that his one-time proximity to the Gandhi family would be forgotten.

Since his flight from India, it has been claimed by the CBI that commissions from Bofors reached Quattrocchi's Swiss bank accounts. He holds the key, therefore, to the bribes scandal. Yet, instead of insulating him from further trouble, Quattrocchi's petition has only succeeded in opining a can of worms.

First, he sought to refute the CBI's contention that he was a "recipient of fruits of fraud". Quattrocchi insisted he had no connection with the culmination of the Bofors transaction and that there had been "no communication between Bofors and the petitioner". So far so good. Then, the CBI--led by Trinath Mishra, the new director appointed by the BJP-led Government--decided to act.

To firmly implicate Quatrocchi, the CBI revealed hitherto "top secret" details of payments made by AB Bofors to middlemen and also indicated the route the bribes had taken (see graphic). This information formed part of the CBI's 30-page affidavit. It had never left the agency's offices previously, not since it arrived from Switzerland in 1997. One of the conditions imposed by the Swiss government was that the papers would be used only as evidence during prosecution, not for political purposes. That is why the bank-related documents had been kept even from Parliament.

The CBI's affidavit was political dynamite. For the first time it formally stated that Quattrocchi had been engaged as AB Bofors' agent only due to his "close proximity to the then prime minister Rajiv Gandhi and his family". The affidavit also spoke of the general perception among ministers and bureaucrats that Quattrocchi was vastly influential and could swing even a contract running into millions of dollars.

To the mortification of the Congress, the CBI was unrelenting in talking about the Rajiv-Quattrocchi nexus: "The investigation has shown that the families of the then prime minister of India and Mr Ottavio Quattrocchi were on very intimate terms to each other and they used to meet frequently. Mr Quattrocchi's family had free access to the prime minister's house. The closeness of the two families is also proved by some photographs collected during the investigation. As a result, Mr Quattrocchi was able to project himself as a person of great influence."

For a case that is over 10 years old -- the allegations of bribery were first made in 1987 -- it is amazing the pieces are falling into place only now. Incriminating documents have been fetched from Switzerland on but two occasions: in 1990 when V.P. Singh was prime minister and in 1997 when H.D. Deve Gowda was heading the government. Over eight years, the CBI remained silent on the Rajiv-Quattrocchi link. This period saw Chandra Shekhar, P.V. Narasimha Rao, Deve Gowda and I.K. Gujral in office -- as Congress prime ministers or Congress-dependent ones.

Just before he demitted office, Gujral claimed he had given the CBI permission to prosecute Madhavsinh Solanki, the Congress politician who as Rao's foreign minister in 1992 was accused of trying to scuttle the Bofors probe. Even so, Gujral seems to have done his bit to slacken the investigation. As prime minister, he sacked Joginder Singh, the CBI chief who brought the key bank documents from Switzerland a year ago. Singh now says he worked overtime to get the case to the prosecution stage but was asked to "go slow" by Gujral.

Yet, Singh's labours are bearing fruit now. For instance, the movement of the bribe money is well-documented. Crucial details have been provided by Myles Tweedale Stott, representative of AE Services. This was a shell company promised a commission by Bofors should it win the contract. In an affidavit sworn before a Swiss court, Stott admits that Quattrocchi's was more than just a consultancy role and "his involvement was greater than I had first imagined". In fact, it was Quattrocchi who made the initial move when in November 1985, he approached Stott to discuss Bofors' chances of winning the lucrative Indian defence contract.

Stott's affidavit clarifies that AE Services, a firm registered in the UK, was itself a subsidiary of a company called Ciaou Anstalt Vaduz (CAV) and owned by S.I. Mubarak and his wife Ritta. The mysterious Mubaraks are about as familiar as the yeti. Nobody knows who they are. Yet, it was they and Major R.A. "Bob" Wilson, CAV's authorised representative, who instructed Stott on how to operate AE Services' bank accounts. Wilson, on his part, was a good friend of Martin Ardbo, president of Bofors.

Stott also confesses that CAV worked on behalf of Sofma, a French munitions manufacturer. Sofma was a strong contender for the howitzer contract which Bofors eventually won. Due to the conflict of interest, the relationship between CAV and AE Services was kept a secret at the time. It is clear today that whoever won the Indian order -- Bofors or Sofma -- the intermediaries, whether AE Services or CAV, would principally have been the same. If this is a coincidence, it is a remarkable one.

There are other strange aspects to the Bofors story. For about a decade, Quattrocchi has had access to the commission ($7.34 million in 1986) paid by Bofors. Yet, he has never withdrawn it. He has only transferred it, from one account to the next, one country to another. This has led to the question: is Quattrocchi the end-recipient or is he looking after the money for somebody else? The money currently lies in two, as yet unknown Austrian and Swiss accounts. The Bofors saga can only continue when the CBI makes some headway with these two accounts.

Whatever suspicions his years of fervid banking may evoke, Quattrocchi is seeking to present it all as innocuous financial dealing. Lawyer Mathur says since the money has not been stolen from the government of India and has not been transferred to any public servant here, there can be no case under the Prevention of Corruption Act.

Quattrocchi's primary defence rests on the technicality that there is still no evidence that the payments Bofors made to AE Services were related to him. Nor that the money AE Services put into his account was the money from Bofors. It could have been an entirely different sum in an entirely unrelated business transaction. Of course, it is puzzling why Quattrocchi, a Snamprogetti employee, was the beneficiary of Bofors' largesse. Quattrocchi is evasive here. His petition does not explicitly state that he did not receive money in the deal. He only stresses that the inquiry has "clearly belied" the accusation that he received commissions from Bofors. How he has arrived at this apparently self-contradictory conclusion is left unexplained.

Quattrocchi's petition talks of no crime having been committed by the Italian business agent as on the date of the fir. It also emphasises that the original fir did not actually mention Quattrocchi as a possible recipient of the Bofors slush money. The fir, filed during V.P. Singh's regime in 1990, spoke of unknown public servants and others being the possible guilty.

Next Quattrocchi argues that Bofors' payments to him may have violated the company's contract with the Indian government but did not constitute a crime. Thus he seeks to distinguish between a criminal act and a mere breach of contract.

It is obvious that Quattrocchi will exploit every legal loophole to prevent being arrested. The Malaysian Government is considering India's request to help take him into custody. His wife Maria has been particularly shaken by the Interpol alert. The upshot has been a harried Quattrocchi moving the high court to have the NBW cancelled.

The court is still to decide on the petition. It is a decision Quattrocchi will eagerly await for. So will India, at 10 Janpath and beyond.

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