The CBI filed an FIR against Rolls Royce India Plc for allegedly paying bribes to finalize the deal for 66 Hawk115 Advanced Jet Trainers (AJTs). An FIR includes charges against British Aerospace Engineering (BAE) Systems. CBI claims that Rolls Royce Plc and BAE Systems bribed Indian officials to secure the defence contract in September, 2004.
The CBI’s charges work against the interests of BAE Systems and Rolls Royce in exploring opportunities in the Indian defence sector. The FIR charges include Sudhir Choudrie, Bhanu Choudhrie, Tim Jones, the Director of Rolls Royce India Pvt Ltd, Rolls Royce Plc, UK, unknown officials of the Indian government and BAE Systems, UK.
The Hawk115 AJTs 2004 Defence Deal
The Indian government inked a deal with Rolls Royce and associates to procure 66 Hawk115 AJTs. 24 of these AJTs were to be flown into India directly and remaining 42 were to be manufactured by HAL. The total cost of the deal was approximately ₹5,653.44 crore.
The AJT Defence Deal was an Rs 8,000-crore project. This cost included the cost of the AJTs, training of 75 Indian Air Force personnel in the UK, the license fee and cost of production at HAL, and the development of infrastructure for the AJTs in the Indian Airforce.
Charges of Graft and Kickbacks
The CBI first suspected foul play in the AJT deal in 2006. The UK Income Tax Department had seized important documents during a raid. These documents had names of intermediaries that were paid a commission to close the AJTs Defence Deal. However, the suspects allegedly burnt all evidence at the time in the UK. Thus, the deal and Choudhries as middlemen were under keen observation of the CBI and international agencies.
In 2012 reports of corruption in Rolls Royce functioning surfaced in the UK media. Consequently an investigation was launched against Rolls Royce by the Serious Fraud Office of London. Consequently, the company released a statement that disclosed illegal payments on transactions with Indonesia, Malaysia, and India.
In 2017 the UK Crown Court at Southwark passed a confirming the involvement of intermediaries in the defence deals in India between 2005 and 2009 by Rolls Royce Plc. Moreover, the judgment specifically highlighted the payment of GBP 1 million by Rolls Royce to an intermediary. This payment was to increase the license fee of Rolls Royce from GBP 4 million to GBP 7.5 million in the contract.
The CBI will follow the case and continue to investigate the AJTs Defence Deal Scam. Primarily, the investigation’s focus will be the major players of this deal. Thereafter, CBI will investigate the government officials involved in the scam.