Brasilia: Brazilian aircraft major Embraer is alleged to have resorted to bribes, used middlemen to secure contracts. A new case of corruption in defence deals involving India has surfaced and according to media reports in Brazil, the issue is being investigated by the authorities in Brazil and the United States.
Brazilian aircraft major Embraer is alleged to have resorted to bribes and used middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was done to a United Kingdom-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation (DRDO) for building indigenous Airborne Early-Warning and Control Systems (AEW&C) aircraft for the Indian Air Force.
According to Brazilian newspaper the Folha de Sao Paulo, Embraer has been under investigation by the US Justice Department since 2010 “when a contract with the Dominican Republic raised the Americans’ suspicions.”
“Since then, the investigation has widened to examine business dealings with eight more countries,” the reports said. The newspaper reported that the company is cooperating with the investigation and “is expecting to reach a deal soon with the American authorities”” and has even set aside $200 million to pay “any eventual fines that come about as a result of the process.”
India had signed a $208-million deal in 2008 for procuring three Emb-145 aircraft. The planes were delivered beginning 2011 and the project is now nearing completion after a series of delays. This is the second major defence deal under the scanner after the VVIP chopper case involving AgustaWestland and both the deals were signed by the previous United Progressive Alliance government.
Indian defence procurement prohibits the employment of middlemen in defence deals. The Defence Ministry spokesperson when asked about the reports said the DRDO will seek explanation and details from manufacturers of Embraer aircraft on media reports on the 2008 deal.
“On receipt of information by the DRDO, further steps may be initiated,” he said.