On May 23, the Central Bureau of Investigation filed a corruption case against Rolls Royce India Pvt Ltd’s director Tim Jones, alleged arms dealers Sudhir Choudhrie and Bhanu Choudhrie, Rolls Royce PLC, British Aerospace Systems and unknown Public Servants and Private Persons.
The FIR has been registered under Sections 120B, 420, and 201 and the Indian Penal Code (IPC) Sections 13(2), 13(1)(d), 8, and 9 of the PC Act 1988. The case has been filed for alleged kickbacks in the procurement of Hawk 115 Advanced Jet Trainer aircraft for the Indian Air Force and Indian Navy. The case has been filed after six years of preliminary investigation.
Notably, as per the officials, a British court order of 2017 also mentioned the alleged involvement of the middlemen and kickbacks by the company for materialising the deal. As per the FIR accessed by OpIndia, the alleged conspiracy took place between 2003 and 2012 where unidentified public servants “abused their official positions” to procure 24 Hawk 115 AJTs for 734.21 million British Pounds.
Furthermore, they also permitted the licenced manufacturing of 42 additional aircraft by Hindustan Aeronautics Limited (HAL) against materials supplied by the Rolls Royce company for an additional payment of USD 308.247 million and USD 75 million under the Manufacturer’s License Fee.
Documents retrieved by the Income Tax department were destroyed to evade investigation
In the FIR, CBI noted that the deal was struck in the backdrop of huge bribes, commissions, and kickbacks that were paid by the Rolls Royce company to the arms dealers even though the agreements, integrity pacts, and associated documents of the deal strictly prohibited any such payments to the middlemen.
During the investigation by CBI, it was found that during a survey conducted by the Income Tax Department in 2006-2007, vital documents related to the transactions were seized from the Rolls Royce India office. However, the accused persons destroyed and removed those documents to avoid investigation.
The FIR read, “It is alleged that Rolls Royce plc was involved in bribing Tax officials and other public officials of Indian Government to prevent investigation by Indian Authorities into its Tax Affairs and use of advisors by Rolls Royce and payment of commissions/fees to intermediaries and middlemen. It is alleged that an amount of GB Pound 1.85 Million was paid by Rolls Royce to intermediaries by means of Commercial Contractual Agreements (CCAS) for retrieval of list commission agent/ advisors from IT Department. These documents, were removed/concealed or destroyed by the accused persons.”
Statement of Fact revealed payments to middlemen
In 2012, media reports alleged corruption in the Rolls Royce operations. It led to an investigation by the Serious Fraud Office in London. In a Statement of Fact, the company is said to have disclosed the payments made to the middlemen in connection to the deals done with countries including India, Indonesia, and Malaysia. The company reached a deferred prosecution agreement with the SFO.
The said statement was cited by Crown Court Southwark, UK in a judgment that pointed out that GBP 1.5 million were paid to an intermediary to retrieve a list of middlemen that the Income Tax Department seized during a survey in 2006 to prevent it from reaching the Ministry of Defence as it could have led to the termination of the contract and a probe by CBI.
Furthermore, CBI said in the FIR that Russian Arms companies paid around GBP 100 million to a company named Portsmouth’s Swiss bank account. Portsmouth is linked to Sudhir Choudhrie. The payment was allegedly done for defence deals with Russia for the purchase of MIG jets.
FIR said, “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 added that Bhanu Choudhrie and his son Sudhir Choudhrie are allegedly unregistered Indian agents or middlemen who worked for different companies like BAES and Rolls Royce. They assisted these companies to get contracts for the supply of HAWK aircraft. CBI added that they used “undue influence on Indian public servants to induce the Government of India to approve the deal”.
Notably, between 2003 and 2012, Rolls Royce and the Government of India signed multiple agreements for the delivery of HAWK aircraft that were delivered to both the Indian Air Force and the Indian Navy. An investigation into the alleged corruption began in 2016. After six years of investigation, CBI filed an FIR against Rolls Royce, middlemen, and unidentified Indian officials.
