CBI files closure report in Denel arms deal scam case

One of the documents which the agency had received during its probe was papers pertaining on which the then defence minister George Fernandes had raised some queries and later approved the contract.

The Denel had clinched the deal in 2003 after which allegation were made that the company had paid money to a British agent Varsa Associates in the Isle of Man to secure the contract.

In its FIR, the CBI had alleged Messers Denel paid Varas Associates, a Company based in Isle of Man, two sums of 24,08,373 $ and 10,99,672 $ on 27 January 2003 and 1,51,350 $ on 19 June of the same year. It was also alleged Varas Associates traded on its influence with the Army’s Price Negotiation Committee (PNC) here. Two arms dealers -- Vipin Khanna and Suresh Nanda – were also quizzed in connection with the case.

CBI, meanwhile, said the agency had received responses of judicial requests from South Africa, the United Kingdom, Isle of Man and Switzerland which did not show any evidence which could substantiate the allegations of corruption.

The sources said South Africa sent a detailed response to the agency which said that while some payments were made by Denel to Varas Associates, the alleged intermediary, but they were not for the deal of anti-materiel rifles which are used by the army for bursting bunkers.

Last year, a team of CBI officers led by its then Chief A P Singh and DIG Praveer Ranjan had gone to South Africa and met the officials there who have assured full-cooperation to the agency.

According to the Indian Defence procurement laws, original equipment manufacturer should not involve any middlemen or intermediary for getting the contract.

It was also reported that the decision to close the case was taken following an informal understanding that the South African armaments major and its employees will withdraw cases and injunctions filed in Indian and South African courts.