(photo credit: )
Federal investigators on Tuesday formally launched an investigation into former Indian Defense Minister George Fernandes, a political associate and a former navy chief for alleged irregularities in the purchase of a missile system from Israel six years ago.
For a Jerusalem Online video of events click here
Fernandes immediately denied any wrongdoing. "I have nothing to do with the deal," he was quoted as saying on national television Tuesday evening.
Israeli firm nears Indian arms deal
The Central Bureau of Investigation, India's equivalent to the FBI, registered the case and began a formal investigation into the defense deal - the first step toward prosecution, the agency said in a statement.
Any charges will be brought in a court on completion of the investigation within three months.
In 2000, India's Defense Ministry signed a contract to buy seven Barak anti-missile systems and 200 missiles from Israel Aircraft Industries Ltd., despite objections by a government-run defense organization that a similar system was available within the country, the CBI statement said.
The agency on Tuesday raided the homes and business premises of six men who had acted as middlemen in the deal, in the cities of New Delhi, Bangalore, Mumbai and Chandigarh, it said.
"A sum of 20 million rupees (US$434,780) was allegedly paid to the then-president of a political party who functioned from the residence of the then-defense minister by middlemen, while the then-treasurer of the party was paid several million (rupees) in the deal," the statement said.
The Press Trust of India news agency identified Jaya Jaitely as the then-president of the Samata Party, or Socialist Party, and R. K. Jain as its treasurer.
"Opinion of the government-run Defense Research and Development Organization was overruled by the then-defense minister (Fernandes) at the behest of the middlemen," the statement said.
Sushil Kumar, who was navy chief at the time, was also implicated by the CBI in the deal. It said he had recommended the import of the weapons systems based on a misrepresentation of facts.
"The then-defense minister not only approved the proposal for import of Barak AMD Systems, but tried to get the proposal approved by the Cabinet Committee on Security," the statement said.
The negotiated rate of US$268 million also was US$17 million more than an earlier agreed rate, for which there was no proper justification, the statement said.