The retired Army officer-turned-dealmaker with a pot-belly has gone missing. In his place has emerged the suave young arms dealer, or at least the suave middle-aged arms dealer who refuses to age gracefully. A golf-and-fitness buff, he dresses sharp and talks global. His cuff links have a diamond jet embossed on them, his black leather Louis Vuitton shoes have pointy toe-fronts, and his Tag Heuer watch has a glint that only money, big money, can exude without embarrassment—especially once the wrist curls around the waist of a blonde with an untraceable accent.
Officially, no such person exists. But you do not have to be an eavesdropper on golfing greens to realise that the figures you overhear—usually anything from “six” to “fifteen”—are no reference to how many holes the course has, but the percentage of the fellow’s cut on the size of the defence deal.
It is, of course, difficult to pin an authentic arms dealer down in India, where his presence is rather ghostly, hovering about Delhi’s corridors of power. Chances are that he owns a front company, which has, for some reason, a very patriotic name like Jai Bharat or Rasthra Rakshak. Many of these fronts are actually thriving businesses that sell Cuban cigars, telecom equipment, designer pens or hospitality services.
There is one other place where you can rub shoulders with an arms dealer: Defexpo India 2012. The exhibition was held last week at Delhi’s Pragati Maidan, with over 200 arms makers from over 30 countries displaying their wares in the hope of getting a shot at India’s $100 billion arms bazaar.
The Defexpo was in full swing when India’s Defence Minister AK Antony brushed aside General VK Singh’s revelation of having been offered a Rs 14 crore bribe by retired Lieutenant General Tejinder Singh to clear an Army order for nearly 600 Tatra trucks. “Our policy is zero tolerance of corruption,” announced Antony.
On arms dealers, the minister insisted, “There are none I am aware of.” At Pragati Maidan, seated in an enclosure of the Defexpo’s Hall 15, a cigar baron by day and at Page 3 parties by night—and an arms and military hardware dealer at all times—sighs in response. “How will the Government deal with us if they maintain we do not exist?” asks the man, an Indian with a triumphant moustache, chewing on a grilled sandwich, sipping Diet Coke, and speaking candidly in the presence of a young blonde who is dressed in a salwar kameez (she has been in India for two years and knows bit of Hindi now).
“We are not the criminals that we are made out to be,” he says, describing his role as that of a catalyst for defence deals. Like others of his ilk, he functions like a public relations agent, but his earnings are of a different scale altogether. And like other such dealers across the world, he has a ‘specialisation”: Indian deals. The job, in his view, is about bridging information gaps. Using one’s knowledge of arms to tell the Government what could suit it best, and explaining to suppliers what exactly is needed. The trouble, he says, is that there are too many dealers who lack domain expertise, have no idea of the product they’re hawking, but cosy up to politicians (often using family connections) and pull strings in South Block, and thus end up delivering junk.
As he speaks, he gets frequent calls and visitors. A serving lieutenant general in civilianwear has something to tell him. They exchange visiting cards, shake hands with military firmness, and promise to meet again soon. When the dealer resumes talking to me, he is categorical. “We are all against this opaque system of arms procurement.” Outdated equipment with outsized price tags are bad for the country, he says.
He has a point. If the process of defence procurement is opened up, government functionaries—politicians, bureaucrats, generals and scientists—could be bigger losers than arms dealers, who are known to operate even in countries with relatively transparent ways of arming themselves. But in India, ‘middlemen’ have always been seen as villains. If not the legacy of Bofors, Gandhian notions of public propriety compound matters. So the Defence Ministry requires suppliers to ‘unequivocally’ confirm in writing that no individual or firm was employed in facilitating any deal struck.
Defence analyst C Uday Bhaskar is of the view that India’s refusal to accept the realities of the global arms trade has resulted in this lack of transparency in defence deals. And what happens behind the scenes has apparently been getting worse. Whatever Anthony may say, CBI investigations have established that arms dealers are pivotal in any deal being swung.
If it is not the Choudharys or Nandas, it’s the Khannas or Vermas. The list of names may be short, but the list of scandals is long. A CBI probe in 2008 revealed that for the Barak missile deal worth Rs 1,125 crore, SM Nanda and Sudhir Choudhary made millions of dollars in kickbacks off Israel Aircraft Industries. And after the Bofors scandal, say Enforcement Directorate insiders, the Khannas’ network has only grown stronger. The CBI has neither filed a chargesheet nor a closure report in this case.
Almost all dealers have close links with politicians and bureaucrats. Sudhir Choudhary also enjoys diplomatic status as the honorary consul general for Latvia. Mohinder Singh Sahni and Vipin Khanna, two other arms dealers in the CBI’s net, enjoyed similar status till recently thanks to Belize and Luxembourg, respectively.
And then there is the one who was conspicuous by his absence at Defexpo 2012. He is in his forties, dusky, and markedly shorter than the blondes he moves around with. Once upon a time, his summer parties had stunning women, expensive liquor, exotic food and powerful guests. But one bad defence deal had him sent to prison. Released not long ago, he now lives in his swanky South Delhi farmhouse and is engaged in a competition with the UB Group’s Vijay Mallya to produce the country’s most scintillating calendar.
“Defence deals are open secrets,” says another dealer who lives in Delhi’s Greater Kailash I. He owns three SUVs, one of them a Range Rover, an arms trade favourite. “I was the first to get this model in India,” he boasts, sitting across a big table with two big computer screens lined along a glass window and a MacBook Air lying near him (all switched off). Large pictures of Sai Baba in golden frames adorn the walls of his office. He is a large man who wears Armani shirts with bold checks, but does not care to hide his small-town origins. He represents Israeli interests in India and he has no qualms talking about it.
Secrecy, he says, should not be confused with opacity in defence deals. As he speaks, a consignment of ten Montblanc pens arrives, each worth $15,000, to be delivered as a gesture of goodwill to his friends in the establishment, all the better for signing on dotted lines. “These are not pens,” he says, “they are writing instruments.”
Yet another arms dealer is happier making distinctions of power. “They (the Government) have the power. We have the money power,” says this 35-year-old arms dealer with a lineage many would envy. Sitting on a leather sofa by a window that overlooks a garden with sprinklers that keep big palm leaves shiny wet, he is served a drink by a White woman in a floral tunic. He introduces her as his ‘office manager’.
“There is nothing hidden from us. The requirements are sent as ‘top secret’ to the military attaché posted at Indian embassies in countries [from where the weapons] can potentially be sourced. The military attaché sends out a wish list to arms suppliers and consortiums. They, in turn, forward this list to their Indian agents, ‘This is what your government wants from us’, with the instructions, ‘Bat for us and get the contract’.”
“How do we operate?” “Simple,” he says, and then describes a complex web of contacts who help him get contracts. To get a deal done, one needs to trust one’s links with decision makers. Luckily, he says, the Government pampers Army officers, with their long retinues of staff, so well that they turn vulnerable after it’s all gone. “We pay them well enough so that their retirement is not a burden anymore, that they live as they used to,” he says.
A general once told him that he had 30 people attending to him: orderlies, cooks, drivers, gardeners, guards, helpers and washermen among them. “That is something even I do not have,” he says, with mock envy. Then he points coolly to a parked 5 Series BMW sedan that he plans to gift to a lawyer friend. It’s all in a day’s work. But if he bears any tension, it does not show. He lives a good life. He has just bought his second yacht and plans to spend some quality time in Canary Islands this summer. “Do let me know if you happen to be in that part of the world…” he offers with half a wink, “Come with a friend.” The meeting ends abruptly with his glamorous office manager reminding him of another appointment.
Deal meetings are closely guarded, and are usually held in Delhi’s five-star hotel suites. Procurement decisions are made at the top of the political structure, but arms purchase recommendations are made by defence officers. Arms dealers first need to work the lower system for a ‘need’ to be expressed. This is done in technical terms, though cleverly coached to eventually fit the precise specifications of what the equipment maker has to offer. Middlemen, in touch with both sides, often stay in touch with top as well as middle-rung officers—brigadiers, sometimes even majors—within the armed forces.
Then there are small-timers who are looking to supply spares and support equipment for which there is always a running tender. They try hard to enter the big league. They wear fake Tag Heuer and Rolex watches. They move about in old Mercedes’ or BMWs and insist on meeting in the coffee shops of five-star hotels.
They too have a big market to cater to. Take the case of this 26-year-old Jat Sikh who calls himself a ‘facilitator’ of arms deals. He compares his humble beginnings to those of SM Nanda, who seems to be his role model. He speaks with a put-on British accent (he had studied for some time at a British college) and appears to be constantly coordinating improbable deals on his iPhone.
Between his incessant calls, the college dropout dealer says that a lot of people tell him he looks like Yuvraj Singh. His uncle retired as a secretary with the Government, and he boasts of connections like Lalit Mansingh, India’s former Ambassador to the US.
He has many journalist friends too. He claims he has teamed up with them for his business. The level of operations is low—he recently had a couple of split ACs installed at a defence correspondent’s Alaknanda apartment, and plans to present another with an Apple desktop computer because he likes to do graphics. He claims that several journalists are on his payroll.
The good thing about being a small-timer is that it is easier to escape attention. With hundreds of defence equipment companies in the fray now, there is enough business for everyone. The sums involved are large even for tertiary defence supplies, and a few lakh can be made quickly on deals that no one particularly bothers with beyond a point.
The trick is to stay networked, and many of these low-contract dealers have made a habit of inviting contacts to parties at some club or the other. Here again, journalists play a role—as passers-on of information and as go-betweens for negotiation positions.
“The perks are according to rank,” says the college dropout dealer. “Our lifestyle is infectious,” he says, beaming. And then, as if to test my resistance, offers to show me what he means: “Check out my ‘car-o-bar’ before you go.” He is referring to a bar inside his E 300 Mercedes.