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India files corruption case against BAE Systems, Rolls-Royce | Business and Economic News

The “criminal conspiracy” case related to the procurement and license manufacture of 123 advanced jet trainers.

India has launched corruption charges against Britain’s BAE Systems plc and Rolls-Royce Holdings, accusing them of “criminal conspiracy” in the procurement and license-building of 123 advanced jet trainer aircraft, according to a federal police document.

The document, dated May 23, said the case was based on the findings of an investigation launched by India’s Central Bureau of Investigation (CBI) in 2016.

Rolls-Royce said on Monday it was continuing to assist Indian authorities with their investigation and disclosed the allegations being investigated when it paid a fine to British authorities in 2017.

“Rolls-Royce today is a very different business. We do not tolerate any form of business misconduct and are committed to maintaining high ethical standards,” a spokesman for the blue-chip company told Reuters by email.

India’s defense ministry did not respond to a request for comment. BAE said it would be inappropriate to comment on an ongoing investigation.

Documents seen by Reuters said the trainer maker paid commissions to middlemen in violation of Indian defense contract rules. The middlemen helped government officials secure contracts by exerting “undue influence” on them.

It also said that Rolls-Royce India and its officials engaged in a criminal conspiracy between 2003 and 2012 with unnamed Ministry of Defense officials and two intermediaries regarding contracts related to the trainer aircraft.

In 2005, India signed a deal to buy 24 Hawk 115 advanced jet trainers for £734.21 million ($926.65 million) and license 42 jet trainers for £308.25 million ($380.94 million). Aircraft, while providing material supply and technology transfer.

The CBI said in its filing that this was done “in lieu of the huge bribes, commissions and kickbacks paid to intermediaries by the aforementioned manufacturers and their officials”.

Between 2008 and 2010, the Indian government licensed 95 billion rupees ($1.16 billion) to build an additional 57 jets under a separate agreement with BAE Systems (Operations) Ltd., it said.

In 2012, the UK’s Serious Fraud Office (SFO) launched an investigation into Rolls-Royce over payments linked to transactions in countries including China, India, Indonesia, Malaysia and Thailand.

Rolls-Royce paid a £497 million ($614.19 million) fine in 2017 to settle the SFO case.

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