The Central Bureau of Investigation (CBI) filed a corruption case against British aerospace and defence company Rolls Royce PLC, its top executives and arms dealers for alleged kickbacks in the procurement of Hawk 115 Advanced Jet Trainer aircraft for the Indian Air Force and Navy, officials informed.
A case under Section 120 (B) of the Indian Penal Code for criminal conspiracy and provisions of the Prevention of Corruption Act has been registered by the CBI against Tim Jones, Director of Rolls Royce India, alleged arms dealers Sudhir Choudhrie and Bhanu Choudhrie, Rolls Royce PLC and British Aerospace Systems following the completion of a six-year-old preliminary enquiry.
In 2017, a British court order also mentioned the alleged involvement of middlemen and payment of commission by the company for swinging the deal, said officials. It has been alleged that during the period 2003-12, the accused in conspiracy with unidentified public servants “abused their official positions” for the procurement of 23 Hawk 115 AJTs for GBP 734.21 million.
They also permitted the ‘license manufacturing’ of 42 additional aircraft by HAL against materials supplied by Rolls Royce for an additional amount of USD 308.347 million and USD 7.5 million towards the Manufacturer’s License Fee.
The deal was finalized in lieu of “huge bribes, commissions and kickbacks” that was paid by Rolls Royce to intermediaries, even though the agreements, integrity pacts, and associated documents of the deal “prohibited payments” to intermediaries and middlemen, the FIR filed by CBI alleged.
The CBI inquiry brought forward that important documents pertaining to the transaction were seized from Rolls Royce India office during a survey conducted by the Income Tax department in 2006-07 but the accused persons destroyed and removed the documents in a bid to evade investigation, the FIR further alleged.
Earlier in 2012, several media reports alleging corruption in the Rolls Royce operations surfaced resulting in an investigation by the Serious Fraud Office in London. The company had prepared a Statement of Fact that disclosed its corruption payments relating to the transactions with countries like Indonesia, Malaysia and India. A deferred prosecution agreement was reached between the company and SFO.
A judgment by Crown Court Southwark, UK which showed that a sum of GBP 1.85 million was paid to an intermediary to het the list of middlemen seized by the IT Department during the survey of Rolls Royce India in 2006 to prevent the list from falling into the hands of Defence Ministry which could have resulted in the termination of the contract and a CBI probe.
The CBI also alleged that GBP 100 million were paid by Russian Arms companies into a Swiss bank account in the name of Portsmouth, a company having ties with Sudhi Choudhrie for defence deals with Russia for the purchase of MIG aircraft.
The FIR also alleged, “Out of this amount, the companies in the name of Choudhrie's family namely Belinea Services Ltd, Cottage Consultants Ltd and Carter Consultants Inc. received GBP 39.2 million, GBP 32.8 million and GBP 23 million respectively between October 2007 and October 2008.”
It further said that Sudhir Choudhrie and his father Bhanu Choudhrie are alleged to be unregistered Indian agents and intermediaries who worked for the company Rolls Royce and BAES for securing the contract for the supply of Hawk aircraft and used the “undue influence of Indian public servants to induce the Government of India to approve the deal”.
