Haaretz exclusive: The man who bribed Indians for Israeli arms sales

Unflattering reports in the Indian press have recently revealed new information about the Indian middleman, Sudhir Choudrie.

According to the reports, Choudrie and companies he owns are suspected of receiving large illegal commissions from billion-dollar arms deals involving Israeli arms sales to the Indian armed forces.

During the past year, Israel has overtaken France into second place (after Russia) in terms of arms supplies to India. In nearly 15 years of close defense collaboration between the two countries, Israel has sold arms, technical knowledge and advanced systems worth about $8 billion to New Delhi.

During the past three years the Indian Central Bureau of Investigation (CBI) has conducted two major investigations against Choudrie and other arms dealers, who are suspected of receiving illegal commissions from Israeli firms, which they then supposedly used to bribe senior officials in the Indian army and navy. The deals, which were signed over a decade ago, also allegedly involved former Indian defense minister George Fenandes and concerned upgrading Indian artillery by the Israeli gun maker Soltam, and the sales of Barak sea-based air-defense missiles made by Israel Aerospace Industries and Rafael.

As a result of the investigations and an arrest warrant issued in 2006, Choudrie moved to London permanently.

Recent reports claimed that Choudrie and another major Indian arms dealer, Suresh Nanda, shared a nine percent commission of the latest arms deal, worth approximately $1.5 billion, for 2,000 ground-based versions of the Barak missile, also produced by IAI and Rafael. The package includes command and control systems, and launchers.

Rules in India forbid commissions to agents, and all deals are expected to be conducted directly, without middle-men between companies and governments. However, the law does allow payment to be made for marketing and other expenses, and investigative reports in India insist that Choudrie's part in the second Barak deal stands at $120 million. The money is officially described as expenses for insurance, transportation and bank fees.

Choudrie, Nanda are Arvin Kano are considered the largest arms dealers in India, with a hand in 80 percent of all arms deals in the country. Choudrie has sternly protected his privacy and his activities, and little is known about either. Those who were invited to business meetings found him to be a generous host who houses his guests at the best London and New Delhi hotels. They were also surprised to discover that his offices in the City of London are situated in a basement floor.

"In our business," he once confided to one of his guests, "it is best to avoid all publicity, give the impression of modesty and avoid attracting attention."

The media in India have been trying to put together a profile of the man, but have found it difficult. Even the photograph that is published here for the first time mysteriously disappeared from a Web site two years ago and can no longer be found there.

Born in 1952 to a wealthy family, Choudrie was sickly and frail and has suffered from diabetes and recently a heart condition. Starting in the 1980s he and his father became involved in arms dealing, first by representing firms from the Soviet Union such as Sukhoi, the maker of some of the many aircraft in the arsenal of India's air force.

Following the collapse of the Soviet Union and the privatization of Sukhoi, Choudrie invested in the firm. This has been an element of his modus operandi: He is a part owner of the firms that he represents in India. Another characteristic of his activities is the large number of offshore firms he registers in tax shelters in order to make it difficult to follow his activities, as well as his profits.

Most of his senior aides are members of his family and his nicknames is "Bunny."

The first Israeli firm to discover the Indian arms market was IAI, which began commercial activities there before diplomatic ties were established in 1993. Since then, IAI arms sales to India have totaled approximately $4 billion. After the Barak missiles, IAI sold unmanned aerial vehicles for observation purposes, and then attack drones. Green Pine, the radar used by the Arrow anti-ballistic missile system, was also sold, as were four AWACS-type aircrafts equiped with the Phalcon radar system.

A decade ago, Choudrie appointed former IAI engineer Uri Manor as his liaison in Israel. Manor refused to comment on this report.

Following IAI, other defense industries in Israel discovered Choudrie's contacts in India to be of great importance. In Israel, he maintains business contacts with former Director General of the Defense Ministry, Amos Yaron. Yaron, too, refused to comment.

Choudrie has also had dealings with a number of Israeli firms, however the relationship has not always been smooth. In one case, his investment in the drone manufacturer Aeronautics Defense System went sour, and following arbitration Choudrie's holdings in the company passed on to businessman Avi Shaked.

The troubles involving Israeli firms have sources close to him saying that Choudrie is considering severing his business ties in Israel.