A consortium of powerful arms dealers from India and Israel was deployed by cash-strapped Israeli defence equipment companies to swing the Rs10,000 crore medium-range surface-to-air missiles (MRSAM) deal with the defence ministry. The contract was signed on February 27 with Israel Aerospace Industries (IAI), and it included a controversial payment of Rs600 crore (6% of contract value) as "business charges".
Sources told DNA that the actual amount of illegal commission paid may have been even higher at 9%, and two of India's powerful arms dealers may have joined hands with two of Israel's in closing the deal on the eve of the elections.
The contract includes joint development of the missiles in association with the Defence Research & Development Organisation (DRDO).
In a series of investigative articles over the past week, DNA showed how the UPA government pushed through the controversial deal with IAI, which is already under investigation by the Central Bureau of Investigation (CBI) in the Barak missile scam of 2000. Despite initial vigilance worries, vague legal opinion and negative consequences for the indigenously-produced missiles in the same class, the government went ahead with the deal and asked IAI to keep quiet about it for a while. DNA's disclosures forced the deal out in the open.
The key arms dealers involved are said to be Sudhir Choudhary and his associates, on behalf of IAI. Suresh Nanda, son of a former navy chief, was deployed on behalf of Rafael, which will end up getting over Rs3,000 crore in the deal. Both Choudhary and Nanda were named in the CBI's FIR filed in 2006 in the Barak scandal.• Deal to help revive IAI p20
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