India's federal police said they are investigating the role of former defense minister, retired navy chief in a bribery case related to a multi-million-dollar deal in 2000 to buy missiles from Israel.
The Central Bureau of Investigation (CBI) said ex-Defense Minister George Fernandes and then navy chief Admiral Sushil Kumar were influenced by middlemen to push the deal, overruling objections by the state-run defense agency.
Fernandes and Kumar rejected the allegations.
India and state-run Israel Aircraft Industries signed a USD 269 million deal to supply the Indian navy with Barak missiles to protect its warships as part of New Delhi's efforts to modernize its army.
The deal was among 48 cases referred by the Indian defense ministry to the CBI in 2004 and 2005 as it suspected irregularities in some of them and that commissions were paid to middlemen, the investigating agency said in a statement.
Bribes were also paid to the defense minister's political party, it said.
Accused minister: Allegations are 'rubbish'
The state-run Defense Research and Development Organization's opinion against the missiles "was overruled by the then Raksha Mantri (defense minister) at the behest of the middleman/agent", the CBI said, referring to Fernandes as the RM.
"The then Chief of Naval Staff colluded with other accused persons and put up a note directly to RM to import six Barak systems, misrepresenting facts," It said.
Fernandes rejected the allegations, calling them "rubbish".
"The missile had been selected before I went into the ministry. It was already there. Thereafter the navy insisted that they needed it," The former minister told reporters.
"If the navy wanted something, it was my duty to see that they got it."Former navy chief Kumar also denied any wrongdoing.
"I am shocked and surprised. The missile defense system project was with the navy for years before I took over as chief," Kumar said.
Fernandes was hit by an arms scandal in 2001 when an Indian news web site released video tapes showing a string of officials apparently taking cash from journalists posing as arms dealers.
That scandal forced Fernandes to quit as minister but he returned to his post seven months later in the middle of an investigation into the scandal. He was later cleared of any wrongdoing.
Fruitful cooperation for over a decade
The Israeli Defense Ministry confirmed reports that the arms deals were being looked into. The Ministry further stated that the Indian investigation team has not approached it and that as far as they know, the Israeli companies contacted by India were cooperating with the investigators.
The selling of weapons and military knowledge has been at the heart of relations between Israel and India for many years. The security relations between the two states started at the beginning of the 1990s, when numerous Israeli defense delegations flooded India in a bid to market their products there. While not much information on deals has been released, it became clear that the countries were extensively trading in arms and military equipment.
The cooperation with the Israeli defense industries included the selling of knowledge and arms, warships, unmanned aerial vehicles, missiles, cannons and electro-optical equipment. According to estimates, the scope of deals ahead of 2000 stood at hundreds of millions of dollars.
Hanan Greenberg contributed to the report