Under CBI probe, Denel admits it paid agent for rifle deal

Sources involved in the investigation said that Denel has now confirmed that Varas was engaged for a fee for providing ‘‘technical assistance’’ for the Indian contracts. This admission, sources said, has come through diplomatic channels and has since been conveyed to the CBI.

A fortnight ago, the CBI had registered a First Information Report (FIR) in the Denel case, alleging pay-offs to the tune of Rs 20 crore for the rifle contracts. The FIR said that Denel had paid Varas 12.75 per cent commission on all deals it had secured despite the ban on agents.

Denel, though, denies it has violated any Indian laws and has described reports of pay-offs for procuring papers of the Price Negotiating Committee as alleged by South African newspapers, as ‘‘nonsensical.’’

Incidentally, a team from Denel, headed by its new Chief Executive Officer, Shaun Liebenberg, is in New Delhi and held consultations with senior officials of the Ministry of Defence and Defence Production.

CBI officials, who have been coordinating with the MoD and the Ministry of External Affairs, say they have copies of agreements between Denel and Varas as well. These agreements were reportedly given by Denel after Indian High Commission officials in Pretoria contacted them.

Significantly, CBI sources say, an early scrutiny of the Varas agreements shows that certain portions, probably the financial clauses, have been erased before being submitted to Indian officials.

The CBI is now working on a Letter Rogatory (request for investigations) that will be sent to Pretoria. The MoD, meanwhile, is continuing with its freeze on all dealings and negotiations with Denel.