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ISLAMABAD: The submarine kickbacks Pandora’s box reopened

By Ansar Abbasi

The post-1996 probe into the Agosta submarine deal, which led to the removal of the then-Chief of Naval Staff (CNS) Admiral Mansurul Haq and a corruption reference against Benazir Bhutto and Asif Ali Zardari, was an alleged cover-up to save many key officials of the Pakistan Navy, besides turning a blind eye to a controversial $550 million deal of minehunters signed in 1992 during Nawaz Sharif’s first tenure.

Documents available with The News show grey areas that remained untraced, while a key naval officer of that time told The News the cover-up in the submarine deal was meant to save the skin of many in the Pakistan Navy and was done by Senator Saifur Rehman, who was only interested in fixing Benazir Bhutto and Asif Ali Zardari.

The most interesting aspect of the whole affair was the statement of the then-director general Naval Intelligence (DGNI), who was instantly turned into an example for others when he was recalled from an overseas course, retired prematurely, court martialed and harassed to keep his mouth shut.

The documents show the naval authorities charged DGNI Commodore Shahid Ashraf of getting Rs 1.5 million from a naval officer, who was alleged to have got illegal gratification and kickbacks from foreign suppliers of naval vessels, etc., but made an approver against the DGNI, who had given to the authorities a list of naval officers who had allegedly received kickbacks but were never touched and promoted as rear admirals instead.

According to a source, the DGNI knew too much and, therefore, he was silenced. The NAB sources also confirmed the existence of a Feb 17, 1995 letter issued by SOFMA (the French company that was involved in Agosta deal) that talked of making payment of $40,000 to each of four naval officers whose names were mentioned in the same letter. Instead of probing the four officers, each one of them was later elevated as Rear Admiral.

A statement of the DGNI submitted before the Board of Inquiry (BoI) was explosive but was ignored. When approached, Shahid Ashraf owned all that he had stated in the documents available with The News, and offered to present himself before a commission to spill the beans and uncover the faces, who, according to him, were alleged to have done wrong but were never touched.

According to Ashraf, the Agosta deal was never struck by Adm Mansurul Haq, who had actually received kickbacks after the award of the contract for its smooth implementation. Those who had received the kickbacks before the award of the contract, he said, were never formally questioned.

In his statement, he had told the BoI: “It needs no emphasis that lions share of kickbacks was paid before the award of the main contract. I had received information as the DGNI that Adm SM Khan, R Adm IH Naqvi, V Adm AU Khan, R Adm A Mujtaba, R Adm Jawed Iftikhar had received gratifications in connection with the award of contract for Agosta 90-B, for favouring the Agosta 90-B submarine acquisition by the Pakistan Navy.”

He also revealed: “Col Ejaz Ahmad was actively pursuing the interest of the contractor and obliging officers concerned from time to time. My sources had intercepted information that Mr DEVENSAY of DCN (French company) had issued instructions in the form of a letter to Col Ejaz stationed in Rawalpindi as agent of DCN to pay $40,000 each to following officers of the Pakistan Navy: a. Cdre Mushtaq Ahmed, b. Cdre Khushnud Ahmed, c. Cdre SV Naqvi, and d. Cdre Naveed Ahmed”. All of these officers were said to be members of the committee for evaluation of technical specification of onboard equipment.

He stated: “A copy of this letter was shown to me by R Adm Sarfraz Khan during investigation by Col Zafar in the presence of the Commanding Officer (Cdr Qazi), Cdre Shahid Nawaz (DGNI) and Cdr Shafiq Ahmed, Registrar Naval Court of Appeals. The copy of this letter was marked to Zafar Iqbal, stationed in Washington as agent of SOFMA, who was arrested by FIA. Mr DEVENSAY had directed him to release an amount of $160,000 out of special fund in favour of Col Ejaz for payment to these (four) officers.”

He also stated: “Cash pay-off to officers was discussed in the Command and Staff meeting held immediately on return of CNS (Naval Chief) Adm Mansurul Haq from France in early 1995. The CNC informed the members that Cdre Shahid Ashraf had called me (Mansurul Haq) in France and seriously upset me by reporting that foreign currency was to be doled out to some serving officers of the PN. However, the investigation remained inconclusive as the Chief of Naval Staff deemed it appropriate to abandon the investigation for reason known to him.”

Shahid told The News he had shared the same information with the then-acting Chief V Admiral AU Khan.

Shahid, in his statement dated Aug 23, 1999, also disclosed: “As far as I can recall, evaluation teams comprising R Adm IH Naqvi, R Adm Jawed Iftikhar and R Adm SA Mujtaba visited China, France, England and Sweden. This team recommended Swedish submarine as FIRST choice. Then another team comprising of R Adm AU Khan, R Adm SA Mujtaba, Capt Mushtaq Ahmed, Capt SV Naqvi and Capt Naveed Ahmed visited France, England and Sweden. Serious deliberation took place at Naval Headquarters to finalise the recommendations. Cdre Khushnud Ahmed (then DNWOP), Cdre Mushtaq Ahmed, Crde Naveed Ahmed (DSMM), Cdre SV Naqvi (then DSMO), Capt ZU Alvi (DNC) remained actively involved in the evaluation process with both the team visited abroad.”

He added: “It should be noted that R Adm Mujtaba was made member of both the teams that visited abroad. The depth of his involvement in the contract before and after its award can be gauged from the fact that he went out of his way in supporting the inclusion of Capt ZU Alvi in the first project team in France despite the fact that Capt Alvi did not qualify the criteria laid for the selection of the project mission team. He had also persuaded the then-CNS (Naval Chief) to override the observations made by the intelligence against Capt Alvi …”

He revealed intelligence sources had also reported that Col Ejaz Ahmed, agent of SOFMA in Rawalpindi, had been in continuous liaison with the evaluation team and other officials in NHQ (Naval Headquarters) and MoD (Ministry of Defence). “I, as DGNI, issued certain instructions to impose restrictions on the agents of foreign firms getting involved in negotiations/agreement.” He noted the whole process to acquire submarines from France took place during the time of Admiral SM Khan, who remained Chief of the Naval Staff from November 1991 to Nov 1994.

He also placed it on record that after he had protested against his “wrongful” retirement to the defence minister, a round-the-clock surveillance was placed on him; he was arrested on the orders of Cdre Rashidullah and detained for several days for recording of the summary of evidence while all other officers were free. “Several coercive measures were taken against me to force me into pleading guilty,” he added.

According to Shahid, he was fixed on the basis of a statement of Capt Alvi, who became approver although there is no provision in the PN Ordinance or PN Rules for approver. Alvi, in his statement dated 17th of Oct, 1998, given under Section 337 of PPC before the additional deputy commissioner, Islamabad, had admitted to have received over Rs 4 million as illegal gratification and kickbacks from foreign suppliers and alleged to have paid some of the amount to Shahid and another officer Capt Liaquat Malik. Shahid said Alvi did not mention the name of many others whom he had paid heavy amounts.

“The BoI (Board of Inquiry) may like to deliberate as to why did he make a statement taking only two names of officers who have been hurriedly tried, forced into pleading guilty and awarded harsh sentences,” the former DG NI said in his statement.

Interestingly, the approver had admitted to have received kickbacks from foreign suppliers of naval craft, stores to Pakistan Navy and transfer of technology to the navy in return of favours shown to them by him in drawing up of contracts, negotiations, supervisions of constructions of sites and otherwise facilitating the contracts between the navy and the suppliers and manufacturers of such naval craft and stores and transfer of technology.

Shahid, according to the charge-sheet served on him, was accused of having obtained money from Capt Alvi, who in all charges was in contact with the foreign suppliers, etc. One of the charges levelled against Shahid also talked of Capt Alvi to have received gratifications in MCMV project meant for the purchase of $550m worth Minehunter special crafts.

According to the former DGNI, this project was finalised during Nawaz Sharif’s first tenure as prime minister but was never probed either by Senator Saifur Rehman, Pakistan Navy or by the NAB. Shahid said the cover-up in the submarine deal to save the skin of many in the Pakistan Navy was done by Senator Saifur Rehman, who was only interested in fixing Benazir Bhutto and Asif Ali Zardari.

Editor’s Note: Since it was not possible to contact all of these officers named or accused, The News would welcome their versions, if and when submitted for publication in these columns.

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