Even as it is buffeted by bribery probes in several countries, aviation major Airbuss operation in India has flown into turbulence with reports of a whistleblower alleging graft in a chopper deal and the leak of sensitive classified information causing alarm in the government.
Even as it is buffeted by bribery probes in several countries, aviation major Airbuss operation in India has flown into turbulence with reports of a whistleblower alleging graft in a chopper deal and the leak of sensitive classified information causing alarm in the government. The Economic Times on Friday reported that Airbus Group has informed the Defence Ministry of an internal investigation into the allegations of the whistleblower over the tender for 14 twin-engine EC725 helicopters for the Indian Coast Guard. The deal is estimated to be worth Rs 2,000 crore.
According to the report, what has alarmed the government is that the whistleblower’s letter making the allegation of graft had several highly classified documents attached to it. When contacted, a senior Airbus Spokesperson told IANS: “Airbus takes all whistleblower allegations very seriously and investigates such allegations thoroughly to ascertain any breach of its code of ethics and compliance. Airbus is fully dedicated to complying with its commitments and obligations under the Indian law.”
He added: “Airbus will not comment on details of the press report concerning an Airbus Helicopter campaign.” Earlier, in February, Airbus had told IANS that the commercial bid for the chopper deal that it had won, valid till February 15, had not been extended – and had therefore lapsed. Airbus had, however, refused to give any further details or the reasons behind the decision.
It is now being speculated that the whistleblower’s allegation and the leak of documents, which first surfaced in December last year, may have been the reason for the non-extension of its commercial bid for the chopper deal. According to the ET report, the anonymous letter sent to the Defence Ministry alleged that “benchmarking norms were changed and spare engine price calculations were hidden to favour Airbus and named three top coast guard officers as beneficiaries”.
The report also alleged that “fugitive arms dealer Sanjay Bhandari and former business consultant Deepak Talwar, both of whom left the country after cases were registered against them by investigating agencies, acted as agents for Airbus”. The chopper deal was important for the Indian Coast Guard as it would have fulfilled its requirement for an advanced helicopter to step up its maritime surveillance so as to prevent a repeat of the Mumbai terror attacks of 2008. Currently, the Coast Guard has aging Chetak helicopters and the Advanced Light Helicopter –Dhruv — in its fleet.
While the Defence Ministry first began its conversation with Airbus almost six years back, the commercial bid for 14 of these medium lift helicopters was made in 2015, and Airbus had emerged as the lowest bidder.
The deal also involved offsets worth Rs 600 crore, and a maintenance, repair and overhaul (MRO) facility was to be set up in Goa. Airbus told IANS that remains engaged with the central government to fulfil the Coast Guard’s requirement for the heavy duty choppers.
“Airbus is engaged with the Indian Coast Guard and the Ministry of Defence to fulfil the need for 14 twin-engine heavy duty choppers following a campaign in which Airbus emerged as the lowest bidder by a very wide margin,” the Airbus spokesperson told IANS.
Airbus’s India troubles come at a time it is bracing for a difficult landing over corruption allegations in several countries. According to media reports, the company’s woes are a result of its use of “commercial agents” – or intermediaries — who specialise in “difficult” territories where they can assist multinationals in securing contracts.
Often characterised as consultancy, such work can be legitimate where it involves technical advice, such as regulatory best practice when bidding for a government contract. In other instances, it is nothing more than a euphemism for knowing who to bribe and for how much, a report in The Guardian newspaper said.
According to another media report, trouble for the group began in 2014, when an internal review of supplier payments at Airbus exposed irregularities. It ended up reporting itself to Britain’s Serious Fraud Office and to France’s equivalent body for lying to export-credit agencies about bribes given by third-party consultants to secure sales.
In October last year, Airbus said it may have violated American rules on arms exports because of fees paid to sales agents to secure deals. Austrian and German authorities are also investigating bribery claims tied to the sale of $2.1 bn-worth of Eurofighter jets back in 2003, the report said.