Karachi affair

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The Karachi affair (French: affaire Karachi), otherwise known as Agosta Submarine scandal, was a major military scandal that took place in the second administration of Prime Minister Benazir Bhutto, involving the presidencies of François Mitterrand and Jacques Chirac in 1992–97. The scandal involved the payment of massive commissions and kickbacks between France and Pakistan over the negotiations to acquire Agosta 90B-class submarines. The submarines utilized the emerging air-independent propulsion (AIP) proprietary designs, which Pakistan was eager to acquire over the nuclear submarines. In 1992, the Benazir government began negotiating with French President François Mitterrand to procure the designs for the expensive and complex submarine, eventually signing the contract in 1994 for a sum equivalent to €826 million ($996m). Negotiations and the decision-making for defense procurement with France was extremely controversial, with the United Kingdom later entering in the competition by offering its four Upholder-class submarines, which were being decommissioned from the military service with the Royal Navy. The Pakistan Navy NHQ wanted to procure the four used British-manufactured diesel-electric Upholder-class submarines, which were already available and at a lesser cost than newly build Agostas, which were still in the prototype phase, and would have taken years to manufacture and deliver. Nonetheless, the Benazir administration selected the Agosta, taking advantage of the lucrative financial credits provided by France. Commissions of 6.25% of the contract, approximately €50 million, were paid out to the lobbying firms in Pakistan and France. Some €50m were allegedly paid as "sweeteners" to various senior Pakistan Navy admirals and officers as well as the political leaders. In 1996–97, the Naval Intelligence led by its Director-General, Rear-Admiral Tanvir Ahmed, secretly launched its investigations into this matter and began collecting physical evidence that eventually led to the exposure of Chief of Naval Staff, Admiral Mansurul Haq, in receiving massive monetary...