The CBI has filed a corruption case against British aerospace and defence company Rolls Royce.
The CBI has registered a case against Tim Jones, Director Rolls Royce India, alleged arms dealers Sudhir Choudhrie and his son Bhanu Choudhrie, Rolls Royce Plc and British Aerospace Systems.
They are booked under various IPC sections — 120-B (criminal conspiracy), 420 (cheating) and provisions of the Prevention of Corruption Act.
The CBI has been doing investigating the case for the six-year-old since the preliminary enquiry registered in 2016.
The case for bribery and corruption continues to mar Indian defence procurement despite the several checks and balances.
In fact, a British court order in 2017 also mentioned the alleged involvement of middlemen and intermediaries in the payment of commission by the company for swinging the deal.
It is alleged that during 2003-12, these accused colluded with the unidentified public servants who abused their official positions. The contracts signed with Rolls Royce and BAE had an integrity clause that barred the engagement of any middlemen or payment of a commission.
The Cabinet Committee on Security (CCS) had approved the procurement of 66 Hawk 115 AJTs on September 3, 2003, under which 24 BAE Hawk 115Y AJTs in flyaway condition with all the accoutrement along with material for 42 aircraft to be manufactured by HAL were cleared for GBP 734.21 million.
In addition to that, a payment of GBP 7.5 million to Rolls Royce as a Manufacturer’s licence fee was also cleared.
In case of violation, the company could be debarred for any Government of India work for the next five years besides a hefty penalty. Besides, the contracts also included a penal clause for using undue influence. It is also notified that, the supplier had to give an undertaking that no commission or fee was paid to any person in relation to the contract.
“The investigation has already concluded on the certainty of the bribes,” points out an industry expert.
“What remains to be seen if the company under trial is barred from any military procurement,” he adds.
The key element of the investigation is the recorded statement of Jones, the then Director of Rolls Royce India. According to the FIR, it is alleged that Rolls Royce Plc was involved in bribing tax officials and other officials to prevent an investigation by Indian authorities into its tax affairs and the use of intermediaries against the agreement.
“There are reasons to believe that significant amounts paid to intermediaries were routed to public servants in India,” the FIR alleged.
While in the UK, the Crown Court Judgment specifically mentions payment of GBP one million by Rolls Royce to an intermediary for increasing the license fee from GBP 4 million to 7.5 million, it alleged.