Brazil, US investigate bribery allegations in aircraft maker Embraer's $208-million deal with UPA
The company has been accused of paying commissions to a UK-based agent to secure the defence contract with the Indian government in 2008.
Brazil and the United States are investigating allegations that aircraft manufacturer Embraer paid bribes to secure a $208-million (approximately Rs 1,391 crore) deal with the Congress-led United Progressive Alliance government, PTI reported on Saturday. The contract for three EMB-145 aircraft fitted with indigenous Airborne Early Warning and Control Systems radars was signed by the Brazilian manufacturer and the Defence Research and Development Organisation in 2008.
The company is alleged to have paid commissions to a United Kingdom-based agent to secure the deal with the Indian government, according to The Times of India, which cited a report by Folha De Sao Paulo, the Brazilian daily that reported the matter on Thursday. Embraer’s defence sales manager Albert Phillip Close told a public prosecutor in Brazil that the company contacted the unnamed representative to assist with the sale of the aircraft to India, according to Folha. The agent was hired in the UK as an Indian law bans the services of middlemen for the purpose of defence deals.
The investigations by Brazilian and US authorities began after a former defence minister of the Dominican Republic was arrested, along with three others, for allegedly accepting a $3.5 million (approximately Rs 23.4 crore) bribe from the company. A Defence Ministry spokesperson said on Twitter that the DRDO will seek an explanation from Embraer regarding the deal signed in 2008.
Defence agreements signed during the UPA’s tenure have come under scrutiny, with deals such as the AgustaWestland helicopter pact turning into a huge financial and political controversy. The contract relates to an agreement in 2010, when the UPA government was to buy 12 helicopters from the British-Italian firm for around Rs 3,600 crore. It was put on hold after Italy arrested the head of Finmeccanica, AgustaWestland’s parent company. The Central Bureau of Investigation had registered a case against former Indian Air Force chief SP Tyagi and 13 others, including his three cousins and the European middlemen involved in the scam.