Controversial arms dealer Sudhir Choudhrie and his son Bhanu were on Wednesday arrested by British officials investigating allegations that iconic car, aerospace and defence major Rolls-Royce paid bribes for contracts in China and Indonesia.
The Serious Fraud Office (SFO) is investigating allegations that the Choudhries acted as intermediaries for the company.
India-born Sudhir Choudhrie, who has been the focus of investigations in India for other allegations, was reportedly questioned over allegations that Rolls-Royce bribed Tommy Suharto, the son of Indonesia's former president General Suharto, to win a contract.
The Choudhries, who have donated often to the Liberal Democrats party — one of the two ruling coalition partners in the David Cameron government — have since been released on bail without conditions.
A spokesperson for the Choudhries said, “The allegations against Bhanu and Sudhir Choudhrie are strongly denied. Full cooperation is being given to the authorities.”
After the SFO opened its investigation December 23 last year, John Rishton, Rolls-Royce Chief Executive, said, "I want to make it crystal clear that neither I nor the Board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance. This is a company with exceptional prospects and I will not accept any behaviour that undermines its future success.”
Millionaire Sudhir Choudhrie big donor of ruling UK coalition partner
Britain's coalition partners Liberal Democrats are now under the spotlight over their close links with multi-millionaire Sudhir Choudhrie, known to friends as Bunny.
He has given the party over £500,000 pounds since 2010 and over £1 million since 2004. (£1 is nearly Rs 104 at present exchange rates).
The entrepreneur, who moved to the UK in 2002 and is now based at a £5 million apartment in London's posh Chelsea neighbourhood, had been on a list of nominations from Clegg's office to be a Lib Dem peer in the House of Lords, but his name mysteriously did not go forward in 2013.
Bhanu manages the family business, C&C Alpha Group, as its chief executive.
The group runs hospitals and care homes across the UK among a string of other ventures, including real estate.
A Lib Dem spokesperson said the party was aware of the allegations but could not comment while the investigation was ongoing.
According to reports, Indian authorities are believed to have recently dropped a separate investigation into Choudhrie as part of a probe into deals done by Italian consortium Finmeccanica.
No charges were brought against him and he strongly denied all wrongdoing.