Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following

The Rs. 10,000 crore missile production deal with an Israeli company, the Israel Aerospace Industries (IAI), has now been exposed as a deal involving massive kickbacks besides being an unnecessary contract. The Left parties had asked in a letter to the Prime Minister in March 2008 that the $ 2.5 billion deal for developing a medium range surface to air missile with the IAI should not be proceeded with in view of the fact that the earlier Barak missile deal with the same company is being investigated by the CBI for kickbacks. The Defence Minister replied to this letter that if there is any impropriety or violation of law, action would be taken (letters attached).

An investigative report by the DNA newspaper has exposed the fact that the Israeli missile deal involves a "business charge" which is six per cent of the total value (approximately Rs. 600 crore). This makes it a scam of ten-fold magnitude compared to the Bofors Rs. 64 crore kickbacks.

The Left parties had written to the Prime Minister again in February 2009 barely three weeks before the contract was signed once again urging the government not to proceed with the deal (letter attached). The reason cited was that the DRDO had already developed a missile system which was superior to the one being offered by the IAI for co-production. The letter also reiterated that IAI should have been blacklisted just like the South African firm Denel which is also under investigation for kickbacks .

Given the seriousness of the charges the government has to answer the following questions:

1. The IAI had got the contract for the supply of Barak missile in 2000 during the NDA regime. The FIR lodged by the CBI in October 2006 names IAI as an accused besides naming the Delhi-based arms dealer, Suresh Nanda and other family members as agents of the Israeli firms IAI and Rafael Corporation. Why was the IAI not embargoed from further supplies till the case was disposed off?

2. Was the Government not aware that the Israeli authorities had investigated the IAI for malpractices in contracts with other countries? Such charges led to the head of the IAI stepping down in 2005.

3. Was the Ministry of Defence not aware that an Indian agent of the Israeli company replaced by another petitioned the Israeli defence ministry claiming additional commissions were due to him?

4. What does the Manmohan Singh government have to say about the DRDO having developed and field proven its Advanced Air Defence (AAD) missile capacity? Why was the DRDO compelled to enter into the so-called "joint development" of the IAI air defence missile when it already has its own superior AAD missile?

5. Was the Manmohan Singh government not aware of the fact that like in the Barak missile deal, there are middlemen and intermediaries involved who are being paid commissions/kickbacks? Was the government not aware of identity of these agents?

6. How does the Manmohan Singh government explain the six per cent "business charges" on the total value of the deal? Is this not contrary to the stipulations against engagement of agents and payment of agency commissions?

7. Why is it that the contract was signed on February 27, 2009 and the fact was kept a secret? The information about the date of signing has now become known from the IAI which has claimed that the Indian government wanted the signing of the contract to be kept secret.

8. Why did the government get the contract signed on February 27, 2009, just two days before the announcement of the Lok Sabha elections?

The Polit Bureau of the CPI(M) demands that the missile contract with the IAI be suspended and an investigation be ordered by the CBI into the contract with the IAI which should be a follow up of the investigations into the earlier Barak missile deal.

Annexure I
Annexure III


soft copy of A.K. Antony’s Letter is not available