The Central Bureau of Investigation (CBI) registered a First Information Report (FIR) against a UK-based arms dealer for allegedly taking kickbacks worth over USD 5.70 million from Brazilian company Embraer in the 2008 three-aircraft deal.
CBI sources said a case has been registered against a UK based NRI whose named had also figured in another defence deal probed by the agency.
They said the kickbacks were allegedly paid in 2009 through subsidiaries of Embraer via a Singapore based company which is owned by the middleman.
It is alleged that the payoffs were routed through Austria and Switzerland.
They said the agency, which had registered a preliminary enquiry in September, has converted it into a regular FIR as enough prima facie material has been found by it to proceed in the case.
The deal for three aircraft which were to be used by Defence Research and Development Organisation (DRDO) for air-borne radar systems was inked in 2008 with Embraer.
A Brazilian newspaper had alleged that the company had taken the services of middlemen to clinch deals in Saudi Arabia and India.
According to defence procurement rules of India, middlemen are strictly barred in such deals.
Leading Brazilian newspaper ‘Folha de Sao Paulo’ had reported that the company allegedly paid commissions to a UK-based defence agent to finalise the deal with India.
DRDO had purchased three aircraft from the company in 2008 and customized them for serving air-borne radar system known as airborne early-warning and control systems or AWACS for the Indian Air Force.
The company has been under investigation by the US Justice Department since 2010 when a contract with the Dominican Republic raised the Americans’ suspicions, the report said.
Since then, the investigation has widened to examine business dealings with eight more countries.
After the PE was registered, Embraer had issued a statement saying, “Since 2011, Embraer has publicly reported that it has been conducting an extensive internal investigation and cooperating with the authorities on investigations regarding alleged violations of the FCPA.
“The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the market. “
“The company is not party of the legal proceedings in Brazil. Therefore, it does not have access to the information contained therein,” it had said.