A $208-million aircraft deal signed with Embraer during UPA rule is being probed by the CBI.
Highlights
- Embraer picked to sell 3 aircraft to Air Force in 2008
- Yesterday, it admitted to bribes for 4 deals including the Indian one
- Embraer is Brazilan firm, investigation against it done in US
A day after plane-maker Embraer admitted corruption in a 200-million dollar deal with India, Defence Minister Manohar Parrikar today said the blacklisting of defence suppliers will not be handled impulsively. According to Mr Parrikar, any criminal activity should be banned, but the extent of the ban "will be based on the requirement of national security".
Here are the 10 latest developments in this story:
In 2008, Embraer, which is the world's third-largest maker of commercial jets, won a deal to sell three surveillance aircraft to India for $208 million.
Yesterday, Embraer, which is a Brazilian firm, reached a settlement with the US Department of Justice and Brazilian investigators and will now pay will pay $205 million to settle a corruption investigation for four foreign contracts including one in India.
NDTV has learned that the Air Force is months away from inducting the first Embraer airborne-warning platform - engineers and scientists at DRDO (Defence Research and Development Organisation) have combined Indian-made airborne warning radars and sensors with the fuselage of the Brazilian Embraer.
The three Embraer aircraft are to serve as the Air Force's "eyes in the sky" capable of detecting dozens of airborne threats simultaneously. On the basis of detecting these threats, the Embraer platform can enable fighter jets to intercept these threats which could include Pakistani or Chinese planes.
A complaint from the U.S. Securities and Exchange Commission (SEC) alleged that Embraer had made more than $83 million in profits from foreign contracts involving $11.7 million in bribes and other payments concealed through false accounting.
In India, Embraer is being investigated by the CBI for allegedly paying $5 million as a kickback to an arms dealer named Vipin Khanna along with two companies based abroad for securing the deal to sell three planes to the Air Force.
The alleged kickback was falsely recorded in Embraer's books and records as part of a consulting agreement that was not legitimate, according to the US investigation.
Under India's defence procurement rules, no middleman can be paid to help secure a contract and the government can cancel a contract if that is violated, or if evidence of bribes surfaces. The seller than has to forfeit any security money it deposited as a bidder.
Embraer has replaced much of its senior management in recent years, reinforced compliance efforts and curtailed use of third-party sales representatives, who drew suspicion in deals under review.
At the end of 2014, India cancelled a deal to buy 12 helicopters for use by VVIPs over bribes being paid for the multi-million dollar deal by Anglo-Italian manufacturer Agusta Westland.
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