Homeward bound

Published : May 26, 2001 00:00 IST

The Hinduja brothers win a reprieve, though partial and temporary, from the judicial process.

CLOSE on the heels of media leaks about their role as facilitators and even participants in the sensitive diplomacy that followed India's nuclear tests in May 1998 (see accompanying story), the Hinduja brothers won a reprieve - though partial and temporary - from the judicial process. Of the three brothers who have been indicted in the Bofors payoffs trial, two have been allowed to go abroad. Srichand and Gopichand Hinduja, both recently naturalised British citizens, have since left the country. Prakash Hinduja, the youngest of the trio, has remained behind. This implicit understanding, of holding one brother hostage to the others' good faith, was proposed by senior counsel Kapil Sibal, who appeared on behalf of Srichand Hinduja.

In the bargain, Srichand and Gopichand Hinduja have attained the dubious distinction of posting the largest bail bonds ever in the country's judicial history. On directions by the Supreme Court, the two London-based brothers posted bail bonds backed by bank guarantees for a sum of Rs.15 crores each. The total liability of Rs.30 crores that the brothers have been compelled to undertake, represents just over twice the known payments that were made by Bofors AB of Sweden to coded Swiss bank accounts controlled by the Hindujas after the howitzer gun deal with the Indian government was concluded in 1986.

The order issued by the Supreme Court Bench comprising Justice M.B. Shah and Justice Y.K. Sabharwal capped a fortnight of rapid developments in the Bofors prosecution. On April 27, the Delhi High Court rejected a plea by the Hinduja brothers that a lower court order barring their departure from India for the duration of the trial be reversed. In pronouncing this order Justice S.K. Agarwal declined to intervene in a decision that the lower court had arrived at in the best interests of the trial. However, he did ask the Central Bureau of Investigation (CBI) to explore the possibility of separating the trial of the Hinduja brothers from proceedings against the other accused. Responding to the plea of the Hindujas that their global business interests would be seriously impaired by a prolonged absence from overseas offices, Justice Agarwal also asked the CBI whether it would be feasible to complete recording evidence in their trial within six months.

The CBI was not inclined to fetter its prosecution of the case against the Hindujas with such a deadline, since the case involves 95 witnesses, of which no fewer than 11 are foreign nationals. But the matter seemingly was reduced to little more than academic interest once the Hindujas filed a special leave petition (SLP) in the Supreme Court seeking permission to go abroad. After the first hearing, Justices Shah and Sabharwal directed the CBI to file its affidavit the following day. It was also directed to state whether it was "practical" to finish the trial within the period of six months, considering the number of witnesses that needed to be examined.

The CBI returned with the plea that the trial court should not be constrained by any deadline in recording evidence. It also stuck to its consistent position that the Hindujas should not be granted permission to leave the country till the conclusion of the trial.

This was a legal necessity imposed by the Code of Criminal Procedure, argued CBI counsel N. Natarajan, since the presence of the accused was required at various stages of the trial - from the moment cognizance is taken of the offence to the time that charges are framed. The pattern of conduct of the Hindujas, he further asserted, did not inspire confidence in their intent to cooperate with the prosecution.

After hearing counsel for the petitioners, the Supreme Court pronounced an interim order on the SLP. Srichand and Gopichand Hinduja are now required to return to India by August 20. Their petition will be taken up for further hearing on August 7.

SHORTLY after the Supreme Court rendered its ruling, the Hindujas were again summoned to CBI headquarters for an intensive session of interrogation. A fresh set of documents had just been received from the Swiss courts in response to a CBI request sent in June last year. It is learnt that these lay out the many transactions by which the payments received from Bofors were dispersed to other destinations. The amount of Swedish kroner (SEK) 81 million (equivalent at 1987 values to about Rs.14 crores) that was paid into accounts controlled by the Hindujas, it is now known, was quickly moved out into numerous other banks with an obvious intent of covering the trail.

In this respect the Hindujas' conduct closely follows the pattern set by the recipients of other tracks of payment in the Bofors deal, Ottavio Quattrocchi, the fugitive Italian businessman and W.N. 'Win' Chadha, the long-time agent for the Swedish arms manufacturer in India. CBI officials believe that the latest documents they have received, knock out another prop in the elaborate defence that the Hindujas have been seeking to construct.

Since last September, when the first intimations were received that a formal charge-sheet would be lodged against them, the Hindujas have been taking the argument that they had indeed received certain payments from Bofors. But these, they have said, had nothing to do with the howitzer gun deal. Rather, they were legitimate compensation for certain counter-trade transactions.

TO buttress this claim, the Hindujas had managed to obtain a certificate from the London firm of auditors, Ernst & Young, to the effect that there had been no diminution in the monies received from Bofors, which were lying invested in various firms controlled by the family.

The CBI gave little credence to this certificate and even the Delhi High Court, while not called upon to assess the quality of evidence in the case, held it to be prima facie, "without any basis". The fresh set of documents provides further sustenance to this finding in the CBI's estimation.

With the Supreme Court's interim ruling and the prospective return of Srichand and Gopichand Hinduja in August, the High Court's suggestions on a six-month deadline and the separation of their trial, lose their centrality. Attention is now likely to shift to Malaysia, where a Kuala Lumpur court has taken up extradition proceedings against Quattrocchi. His return to India, where he was known to exert enormous influence during the prime ministerial tenure of Rajiv Gandhi, is a consummation that the CBI investigation keenly awaits.

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