Embraer’s over $200 million defence deal with India under graft scanner in Brazil and US

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New Delhi | Updated: September 10, 2016 10:48:42 AM

India is set to be hit by another defence corruption scandal and probe, this time involving Embraer's over $200 million deal for EMB-145 with DRDO.

Embraer jets with indigenous radars that can serve as airborne early-warning systems for the IAF. (Reuters)Embraer jets with indigenous radars that can serve as airborne early-warning systems for the IAF. (Reuters)

India is set to be hit by another defence corruption scandal and probe, this time involving Embraer’s over $200 million deal for EMB-145 with DRDO. The deal involved mounting the Embraer jets with indigenous radars that can serve as airborne early-warning systems for the IAF. The deal was inked by the UPA government in 2008. According to media reports, Brazil and US are investigating whether bribes were paid by the Brazilian aircraft manufacturer Embraer to strike the deal with India. US and Brazil authorities are probing if Embraer hired a middleman, based out of UK, to bag the deal with India. Such a practice is banned by the Indian military procurement laws.

The scope of the probe also extends to defence deals made by Embraer with Saudi Arabia. The investigations came to light after a Brazilian newspaper Folha de Sao Paulo reported that a possible bribery in the 2008 Indian deal was under the scanner of the US justice department. Embraer has been under probe by the US justice department since 2010 after a contract with the Dominican Republic had raised doubts.

The newspaper has quoted Albert Phillip Close, Embraer’s defence sales manager, as saying that an ex-sales director of the company told US investigators that the firm had contracted a representative to assist in the sale of the surveillance systems to India. According to the paper, a representative from UK was hired because Indian laws ban middlemen in defence deals. While Embraer has not commented on the Indian deal being under scanner, the newspaper said that some company officials have confirmed that to be true. Some reports suggest that the investigation is only in preliminary stages and things are in the “realm of speculation” unless the identity of the agent can be made and it can be established without doubt that that money was paid in bribes

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