The treasury manager at Pilatus SA left the meeting in Stans, Switzerland and instructed the Union Bank of Switzerland to wire one million swiss francs into the account of Offset India Solutions that would cause the Indian bank manager to spill his morning tea.
The challenge for the branch manager in the India of 2009 was to find a way to move cash generated by small business owners through banking regulations to the destination of suppliers without troubling regulators. A challenge might be thousands of the local currency not swiss francs in the millions and not from the sleepy Canton of Nilwaden
The Indian Air Force was in the market for 75 trainer aircraft or about as many as Pilatus SA could make in one year. The order was worth 500 million Swiss Francs before adding the cost of thirty years of maintenance and spares. Pilatus decided in the Stans meeting that it was better to cheat than compete.
The branch manager watched another ten million francs go through the OIS account in August and October 2010 two years before the IAF bought the plane. Pilatus could have routed the monies to real estate in London, Dubai, and Panama for a Mr Bhandari but that was not as entertaining as watching him create twenty-five private limited companies for garments or the few million francs for a house in London delivered to the husband of the great-granddaughter of the first Prime Minister of India. These line items must have escaped the math of the buyers.
Indian government monies are borrowed from domestic financial institutions sourced by bank deposits and insurance premiums of earnest citizens that are then spirited out of the country by a political elite in exchange for contracts awarded to select vendors. These monies find their way to the most anonymous destinations possible with Switzerland the preferred destination before the balmy former colonies joined the circus. The Swiss enjoy on average 20 billion swiss francs a year of these deposits and swiss banks blessed with the nonliability, liabilities can allocate credit without concern for default because the next 20 billion capital flow is just a year and a kleptocrats pen stroke away.
Thinking about it a little harder it would seem that in the years since independence a fair amount of Indian public monies were lodged in Swiss deposits. Some of those deposits landed in the custody of the Hinduja Bank. The Hindujas are a clan tangent to spirited deposits for over a century and now find their rumpled laundry in UK courts for that generational dispute over who gets how much of material assets created by the industry of others. Pilatus claimed that its shareholders were 100% Swiss. That may be the historic 8 million Swiss before the recent migrations or maybe it was Hinduja Swiss.
In either case Swiss banks have ample credit to circulate but the meeting in Stans overlooked what Mr Bhandari's legal expenses might be years after the deal during his refuge from extradition in London. In time Indian investigators followed the money from Stans and attached Mr Bhandari's assets which proved an inconvenience for his lawyers.
The judge demanded a “decent explanation” for a nearly 10-week extension being sought for the submission of defence evidence. He was informed that the previous law firm, Bindmans, had withdrawn from the case after Bhandari was unable to make a second “significant payment” due to his assets in India being attached.
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