STOCKHOLM, Sweden -- Swedish Radio reported today that the $1.3 billion contract Swedish arms manufacturer Bofors signed with India in 1986 included a 3 percent commission to middlemen and agents.
Company spokesmen have said no intermediaries were employed after Indian Prime Minister Rajiv Gandhi, crusading against corruption, asked in 1985 that no middlemen be involved in contract negotiations.
But Swedish Radio, quoting unidentified sources, said Bofors former Administration Manager Per Ove Moberg last year showed the Central Bank the contract for 400 howitzers that included a clause specifying that $40 million be paid as commission to middlemen and agents.
Charges of high-level corruption in the Bofors deal has shaken Gandhi's government, which also has been hurt by a recent disclosure of bribery in the purchase of four West German submarines in 1981.
According to Swedish Radio, Moberg told a Central Bank employee handling Bofors money transfer the $40 million was a commission.
The main part of the money was paid to Swiss bank accounts in May 1986, the radio reported.
India's ambassador to Sweden, Bhupatray Oza, called the report of a clause for provisions 'absurd.' He said no such clause existed in the contract and if payments for provisions had been made, they violated the agreement.
Bofors spokesman Per Mossberg declined comment on the content of the contract, signed in March 1986, or whether commissions were paid, saying the arms company could not reveal business secrets.
Mossberg has said that no intermediaries were employed after Gandhi's request and that Bofors never bribed anyone.
In response to demands of an investigation from Gandhi, the Swedish government on April 29 ordered the National Accounting Office to examine Bofors' transactions to determine whether payments to Indian officials and middlemen were used.
Swedish Radio alleged on April 16 that Bofors paid $5 million of a total $16 million pledged in bribes to secret Swiss bank accounts held by Indian procurement agents during November and December 1986.
Bofors and its holding company Nobel Industries are involved in an arms smuggling scandal and have admitted to exporting munitions to countries blacklisted under Sweden's arms export laws.
Police are investigating charges the concern also smuggled explosives to Iran.