The Central Bureau of Investigation (CBI) today registered a case against British defence firm Rolls-Royce, its India director Tim Johns, arms dealers Sudhir Choudhrie and Bhanu Choudhrie, and British Aerospace Systems (BAE) for alleged corruption in the procurement of the Hawk aircraft. The CBI said that the case is related to alleged corruption by public servants in procuring 24 Hawk 115 Advance Jet Trainer Aircraft.
The CBI said unknown public servants abused their official positions and approved and procured a total number of 24 Hawk 115 Advance Jet Trainer (AT) aircraft for GBP 734.21 million, besides permitting licence manufacturing of 42 additional aircraft by India's Hindustan Aeronautics Limited (HAL) for an additional amount of $308.247 million, and $7.5 million towards the manufacturer's license fee, by paying bribes and commissions to intermediaries.
In 2008-10, the accused also approved the licensed manufacturing of 57 additional Hawk aircraft by HAL for a value of Rs 9,502.68 crores under a separate agreement with BAE Systems (Operations) Ltd, another firm under the BAES Group, the investigation showed.
In a meeting held on September 3, 2003, the cabinet committee on security (CCS) and the ministry of defence sanctioned the procurement of 66 Hawk 115 Aircraft and the signing of an Inter-Government Agreement between the governments of India and the UK product support. On March 19, 2004, a Memorandum of Understanding was also signed between the two countries for long-term product support.
After that, two contracts, both dated March 26, 2004, for the supply of 24 HAWK Aircraft through direct supply and transfer of technology for 42 Aircraft to be manufactured by HAL were signed between the ministry of defence and BAE Systems/Rolls-Royce.
The contracts had specific commission prohibition clauses stating that Rolls-Royce/BAE would not engage any agent or middlemen to facilitate the deal nor pay any money to any individual.
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Based on media reports, in 2012, the United Kingdom's SFO (Serious Fraud Office) started investigating allegations of Rolls-Royce paying bribes to secure projects in India and other countries.
The probe by SFO showed Rolls-Royce paid an amount of GBP 1 million to Indian middlemen for a rise in the price of license fees from GBP 4 million to 7.5 million.