CBI Charges Rolls Royce, Top Executives in Corruption Case

The investigation showed that Rolls Royce paid bribes to Indian tax officials
CBI Charges Rolls Royce, Top Executives in Corruption Case

NEW DELHI: For alleged corruption in the 2004 purchase of 123 Hawk 115 Advance Jet Trainer Aircraft, the Central Bureau of Investigation has filed a case against British multinational aerospace and defense company Rolls Royce, its former India Director Tim Jones, arms dealers Sudhir Choudhuire and Bhanu Choudhuire, and British Aerospace Systems (BAE Systems).

According to CBI sources, the accused engaged in a criminal conspiracy with the then-public servants to use their positions of authority to approve and purchase 24 Hawk 115 Advance Jet Trainer (AT) aircraft for GBP 734.21 million, which were intended to be delivered to India in flyaway condition, as well as to authorise India's Hindustan Aeronautics Limited (HAL) to manufacture 42 additional aircraft through technology transfer for an additional sum of USD 308.247 million, and to obtain t

According to the investigation, the accused authorised the licence manufacturing of 57 additional Hawk aircraft by HAL between 2008 and 2010, valued at $9,502.68 crores, as part of a separate agreement with BAE Systems (Operations) Ltd, another BAES Group company, according to CBI sources.

The purchase of 66 Hawk 115 aircraft and the signing of an Inter-Governmental Agreement between the governments of India and the UK for long-term product support were both authorised by the Cabinet Committee on Security (CCS), Ministry of Defence, during a meeting held on September 3, 2003. On March 19, 2004, the two nations subsequently signed a Memorandum of Understanding.

Within a short period of time, the Ministry of Defence and BAE Systems/Rolls Royce signed two contracts, both dated March 26, 2004, for the direct supply of 24 HAWK aircraft as well as the transfer of materials and technology for 42 aircraft that would be licenced built by HAL.

The contracts included "Agent/Agency Commission Prohibition Clauses" stating that the supplier (Rolls Royce/BAE) must confirm that it has not hired any middlemen to mediate, facilitate, or in any other way recommend to the government of India for the award of the contract, nor has any money has been paid to any such "individual/agent/middlemen".

In connection with defence transactions with Russia for the acquisition of MIG fighter aircraft, it was discovered via the investigation that GBP 100 million was deposited into a Swiss bank account in the name of Portsmouth, a business connected to Sudhir Choudhrie.

While the Indian Navy has 17, the IAF has 123 Hawk Advanced Jet Trainers. HAL is the main licensee for most of these.

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