Biotechnology company Bharat Biotech on Friday said that it has terminated the memorandum of understanding to sell its coronavirus vaccine, Covaxin, to Precisa Medicamentos, its intermediary in Brazil, Reuters reported.

The company said that it will continue to work with Brazilian healthcare regulator Anvisa to obtain all required approvals for the use of Covaxin in the country.

Bharat Biotech has developed Covaxin in collaboration with the Indian Council of Medical Research and the National Institute of Virology. The Indian government and Prime Minister Narendra Modi have taken pride in showcasing Covaxin as the country’s first indigenously developed vaccine against Covid-19.

A federal investigation is underway into alleged irregularities in a contract between Brazil’s health ministry and Bharat Biotech for 20 million (2 crore) doses of Covaxin. The deal was made despite Covaxin’s failure to obtain regulatory clearance for the vaccine’s use in the country. The Brazilian government suspended its contract with Bharat Biotech on June 29.

The corruption allegations pertain to buying the Covaxin doses at a higher price. To buy vaccines, the Brazilian health ministry needed to pay $320 million (Rs 2,375 crore approximately) to Precisa Medicamentos. So each dose of Covaxin will cost Brazil $15 (approximately Rs 1,100).

This is significantly higher than what the health ministry paid for American pharmaceutical giant Pfizer’s vaccine, which had obtained regulatory approval.

On July 2, a Supreme Court judge in Brazil had opened a criminal investigation into President Jair Bolsonaro’s role in the deal. Justice Rosa Weber gave the authorities 90 days to collect evidence.

Authorities are investigating whether Bolsonaro committed the crime of “prevarication” – delaying or refraining from action required as part of a public official’s duty for reasons of personal interest. Weber did not dismiss the possibility of prosecutors looking into other potential wrongdoing in the contract.

Logistics department official Luís Ricardo Miranda had informed prosecutors that he was under pressure by Alex Lial Marinho, an aide to one of Bolsonaro’s closest allies, to purchase the Bharat Biotech vaccine.

Officials from the Brazilian health ministry had also reportedly not considered that Precisa had a history of alleged irregularities in contracts with the federal government.

Since these allegations were made public, both Bolsonaro and Bharat Biotech have denied any wrongdoing. On June 28, the president said that he could not follow everything in the government and added that he trusts his ministers.

Bharat Biotech had said that it followed a “step-by-step” approach for supply contracts and regulatory approvals for its coronavirus vaccine. The company had added that as of June 29, it has neither received any advance payment nor supplied any vaccine doses to the country.