The Central Bureau of Investigation (CBI) has taken action today, registering a case against British multinational aerospace and defence company Rolls Royce. The case involves alleged corruption in the procurement of 123 Hawk 115 Advanced Jet Trainer Aircraft back in 2004. The accused individuals include Rolls Royce’s former India Director Tim Jones, arms dealers Sudhir Choudhuire and Bhanu Choudhire, as well as British Aerospace Systems (BAE Systems).
According to CBI sources, the accused, in collaboration with public servants at the time, misused their official positions to approve and acquire 24 Hawk 115 Advanced Jet Trainer aircraft for a total of GBP 734.21 million. These aircraft were intended to be delivered to India in a flyaway condition. Additionally, they allowed India’s Hindustan Aeronautics Limited (HAL) to license manufacture 42 additional aircraft through technology transfer for an extra USD 308.247 million. The Manufacturer’s Licence Fee was also increased from GBP 4 million to 7.5 million, supposedly through the payment of substantial bribes, commissions, and kickbacks to intermediaries. These payments were made despite contractual agreements explicitly prohibiting such transactions with intermediaries and middlemen.
Further investigation has revealed that, between 2008 and 2010, the accused authorized the license manufacturing of an additional 57 Hawk aircraft by HAL, amounting to ? 9,502.68 crores, under a separate agreement with BAE Systems (Operations) Ltd, another entity within the BAES Group.
The initial approval for the procurement of 66 Hawk 115 Aircraft, as well as the signing of an Inter-Government Agreement between India and the UK for long-term product support, was granted by the Cabinet Committee on Security (CCS), Ministry of Defence. Subsequently, a Memorandum of Understanding was signed between the two countries on March 19, 2004. Two related contracts, both dated March 26, 2004, were then signed between the Ministry of Defence and BAE Systems/Rolls Royce. One contract involved the direct supply of 24 Hawk Aircraft, while the other covered materials and technology transfer for the license manufacturing of 42 aircraft by HAL.
Notably, these contracts included clauses explicitly prohibiting the engagement of agents or agencies and any payment to intermediaries or individuals involved in recommending the awarding of contracts to the government of India.
In 2012, the UK’s Serious Fraud Office (SFO) initiated an investigation into allegations of corrupt practices by Rolls Royce in securing projects not only in India but also in other countries. The SFO’s probe uncovered evidence of Rolls Royce paying a bribe of GBP 1 million to Indian intermediaries to secure an increase in the license fee from GBP 4 million to 7.5 million.
Furthermore, the SFO’s investigation revealed that Rolls Royce had also paid bribes to tax officials in India to prevent an inquiry into the company’s tax affairs. Additionally, it came to light that GBP 100 million had been paid by Russian arms companies into a Swiss bank account associated with Sudhir Choudhrie’s company, Portsmouth. These payments were related to defense deals with Russia for the purchase of MIG fighter aircraft.
The Indian Air Force currently operates 123 Hawk Advanced Jet Trainers, while the Indian Navy operates 17. Most of these aircraft are being license-manufactured by HAL.
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