British defence major Rolls Royce made ‘secret payments’ of around 10 million pounds to an Indian defence agent that may have helped the company to win a big contract for engines on Hawk aircraft used by the Indian Air Force, a media report has said.
Hawk aircraft are used by the Indian Air Force for training purposes.
An investigation by the Guardian and the BBC has uncovered leaked documents and testimony from insiders that suggest that Rolls-Royce may have benefited from the use of illicit payments to boost profits for years.
The network of agents is now the focus of large-scale investigations by anti-corruption agencies in Britain and the US.
The Guardian understands the inquiries are looking into specific allegations that these hired intermediaries were bribing people.
The person who is alleged to have received the secret payment of over 10 million pounds was arms dealer Sudhir Choudhrie, BBC reported on Monday.
The arms dealer, who is on the Indian government’s blacklist of people suspected of “corrupt or irregular practice” is now settled in London.
The blacklist warns government officials and ministers to be extra cautious while dealing with people and companies on the list.
The report also quoted Choudhrie’s lawyer as saying that his client has never paid bribes to Indian government officials or acted as an illegal middleman in defence deals.
Choudhrie also serves as an adviser on India to the Liberal Democrat leader Tim Farron and his family.
Rolls-Royce, which sells turbines and engines for passenger jets and military aircraft and is worth an estimated 13 billion pounds, declined to answer detailed questions.
A company spokesman said: “Concerns about bribery and corruption involving intermediaries remain subject to investigation by the Serious Fraud Office (SFO) and other authorities. We are fully cooperating with the authorities and we cannot comment on ongoing investigations.”
The Guardian/BBC investigation, broadcast on the BBC’s Panorama programme on Monday, disclosed that the use of agents by the blue-chip manufacturer is far wider than previously publicly known.
The agents have been hired in at least 12 countries: Brazil, India, China, Indonesia, South Africa, Angola, Iraq, Iran, Kazakhstan, Azerbaijan, Nigeria and Saudi Arabia.
Labour and Conservative administrations have forged close relations with Rolls-Royce and have often lobbied foreign governments to give large export contracts to the manufacturer.
Britain’s former Prime Minister David Cameron once praised it as “a world leader in the development of advanced technologies ... of which the whole country can be proud. The Duke of Cambridge called it “one of the United Kingdom’s great global companies”.
The investigation into Rolls is likely to concern ministers -- a situation that has echoes of the controversy that enveloped the SFO’s inquiry into the arms manufacturer BAE Systems. In 2006, Tony Blair’s government pulled the plug on that inquiry, saying Britain’s security would be put in danger if it was allowed to continue.
The SFO’s entirely separate investigation into Rolls-Royce became public in 2012 when the firm announced that the agency had requested information about allegations of malpractice in Indonesia and China.
The following year, the SFO, backed by special funding from the Treasury, disclosed that its director, David Green, had opened a criminal investigation into allegations of bribery and corruption. It emerged in 2014 that the Department of Justice in the US had opened its own inquiry.
A legal source said 30 investigators in Britain were now focused on the multinational’s use of agents, or middlemen, to clinch export contracts in a number of countries across several strands of its business.