Quattrocchi loses another round

Print edition : August 15, 1998

The Delhi High Court ruling dismissing Ottavio Quattrocchi's petition challenging the arrest warrant issued against him by the CBI has removed yet another legal hurdle in the case.

ON August 5, the Delhi High Court dismissed a petition by fugitive businessman Ottavio Quattrocchi pleading for the quashing of the an arrest warrant issued against him by the Central Bureau of Investigation (CBI). It is difficult precisely to gauge what drove Quattrocchi to seek the protection of a judicial system that he was fleeing from. In moving the court in March, the Italian businessman and former friend of the Rajiv Gandhi family only succeeded in bringing into public focus some aspects of the Bofors scandal that till then had remained remote.

While dismissing Quattrocchi's petition, a Division Bench of the High Court upheld the arrest warrant and directed the CBI to execute it in accordance with the law. The warrant stood the test of legality, ruled Justices Devinder Gupta and N.G. Nandi, since there was prima facie evidence that Quattrocchi was involved in the Bofors case. This also meant that the 'red alert' issued by Interpol on the request of the CBI remained valid.

In dismissing Quattrocchi's petition, the court put on record its disinclination to accept the argument that the evidence against him was "scanty". Also turned down was the plea that no particular offence had been made out against him.

The task of bringing Quattrocchi back to face the legal process in India remains as knotty as ever, although the Delhi High Court's ruling means that his movements will remain restricted. The former agent of an Italian fertilizer conglomerate who managed to foist himself on the Indian Army's massive acquisition programme for howitzer field guns will find it difficult, if not impossible, to obtain entry into any other country. Resident in Malaysia since being identified in July 1993 as one of the appellants contesting a Swiss court's decision to transfer to India documents connected to the Bofors payoffs, Quattrocchi remains vulnerable to arrest on entry even in his native Italy. Seemingly deprived of any other recourse, Quattrocchi has offered to clear the air by inviting some "responsible" person to interrogate him in his haven in Malaysia. Against the background of his persistent evasion of the CBI's queries, this must seem rather odd.

An attempt by the CBI to obtain his extradition in February 1997 was thwarted by the Malaysian police on the grounds of insufficient evidence. Malaysia, like India, is a signatory to the Commonwealth Convention on mutual assistance in matters criminal and its penal code is akin to India's. But it provides for the trial of extra-territorial offences only in the case of certain "offences against the state", which are defined precisely.

On a parallel track, the CBI was following the monies paid out by Bofors as they traversed a circuitous route across the world. The payoffs received in April 1986 were parked in a Zurich bank and moved to Channel Islands in a matter of days. A letters rogatory was sent to the British Government, which exercises sovereignty over Channel Islands, in November 1997. This was followed by the visit of a team of CBI investigators to Guernsey in Channel Islands.

What the CBI uncovered in Guernsey was the further rapid transit of the payoffs, to four coded accounts in Vienna and Geneva. This is the stage at which Quattrochhi made his counter-move, seeking a judicial quashing of the warrant issued against him.

QUATTROCCHI'S petition had the immediate effect of focussing minds. The CBI in its counter-affidavit formulated the state of knowledge on the Bofors investigations with a clarity that was lacking earlier. It states quite definitively, for instance, that A.E. Services - the mysterious shell company that materialised on the scene with an assured entitlement provided the howitzer deal was concluded within a tight deadline - was a Quattrocchi operation entirely owned by another of his registered firms.

A.E. Services had privileged information that Bofors was the likely winner of the contract. This alone enabled it to obtain a substantial chunk of the take without rendering any tangible assistance to the cause of either the purchaser or the seller. And in this respect, the CBI affidavit before the Delhi High Court was brutally candid: "Investigation has shown that the families of the then Prime Minister of India and Mr. Ottavio Quattrocchi were on very intimate terms with each other and they used to meet frequently... Mr. Quattrocchi and family had free access to the Prime Minister's house."

A.E. Services' entry into the negotiations was in effect an agreement to cheat "because the two parties to the agreement conspired to deceive the Government of India and dishonestly induce it to part with moneys... to the tune of US $7.34 million," says the CBI affidavit.

IN its order dismissing Quattrocchi's plea, the Delhi High Court agrees with the CBI assessment that his offence is to be viewed in its illicit linkage with the actions of a number of Indian public servants. This removes another legal hurdle that had restrained the agency from launching prosecutions in the Bofors case. The political obstacles, however, are quite another matter. Consent is awaited from the Government for the prosecution of two senior civil servants from Rajiv Gandhi's tenure as Prime Minister - former Defence Secretary S.K. Bhatnagar and former Principal Secretary to the Prime Minister, G.K. Arora. These apart, Madhavsinh Solanki, External Affairs Minister in the Narasimha Rao Cabinet, faces prosecution for his maladroit attempt to obstruct the course of the law. These permissions, mandatory under Indian law, have been on hold for over a year.

Meanwhile, proceedings are on in a Swiss cantonal court for the transfer of documents pertaining to another set of Bofors payoffs - on the Pitco-Moresco track, believed to implicate an influential family of expatriate Indian businessmen. Once this hurdle is cleared, there is likely to be another appeal before the Swiss federal court. Whether the Bharatiya Janata Party-led Government will, through this long haul, retain its fervour for the pursuit of wrong-doing is unclear. What is indubitable is that in the course of its seven-year long odyssey, the legal process connected to Bofors has established a degree of autonomy, which to an extent, puts it beyond the scope of political meddling.

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