Bofors probe: Breakthrough turns a blunder

NEW DELHI: The CBI''s investigation into the Bofors payoffs has suffered a crippling blow with what was thought to be a breakthrough turning into a false trail.
In a major setback to the investigating agency, it has been discovered that the money lying in the two London accounts of alleged middleman Ottavio Quattrocchi didn''t originate in Bahamas, as originally believed.
The "discovery" of the origin of the money that the agency maintained was the kickback Quattrocchi got from the Swedish manufacturers of the 135 mm howitzers, had been held to be a major breakthrough which the agency thought can help it unravel the mystery of Rs 64-crore scam.
It was in April 2004 that the agency, based on the inputs it got from teams that visited Bahamas, Switzerland, the US and other places, claimed that the money had come to London from Bahamas. It even "re-constructed" the route the kickback money would have taken while reaching the two accounts.
The excitement turned into disappointment two months ago when the agency found out that the money trail it had constructed was completely erroneous. "The latest evidence shows that the money reached London from a Swiss bank," says an officer.
The agency is now left with no substantial lead to pursue. It has, of course, taken up the case with the Swiss authorities, but that is seen as more of a proforma exercise. Senior officers concede it is a futile endeavour. "As a rule, countries like Switzerland do not entertain requests for cooperation in cases which are more than seven years old," one officer said.
Though disappointed, some of the officers on the case want to persevere with it. "The CBI is taking a stand that since the fact (of the money reaching the London accounts from a Swiss bank) was discovered only in 2004, the Swiss government should help the agency to get more facts on the issue," one officer said.
According to sources, establishing the exact route of the kickback money - from the origin in Sweden to Quattrocchi''s London bank accounts - is critical for the CBI''s effort to make a substantial case against the accused.
In 2003, the agency found two accounts in BSI AG Bank in London, which it said belonged to Quattrocchi. The accounts collectively had about Rs 21 crore.
After a request from the CBI, the accounts were frozen by a British court. The CBI had contended that the money in these accounts was believed to be part of the kickback that the Italian businessman got for using his Indian "connection" to swing the howitzer deal.