2012 Pilatus Aircraft Deal: IAF officials, arms dealer booked for graft
Unnamed officials of the Indian Air Force (IAF) and Pilatus Aircraft Limited of Switzerland, and Sanjay Bhandari, an alleged arms dealer and middleman, have been booked by the Central Bureau of Investigation (CBI) for allegedly influencing the sale of the Swiss-made basic trainer aircraft to India, the CBI said on Saturday.
India paid Rs2,895.63 crore for 75 Pilatus trainer aircraft in May 2012. The Swiss-made planes replaced the indigenously built, 1988 vintage HPT-32 trainers, which were grounded after a series of accidents.
The Pilatus was picked through a two-year selection process.
Others who were in the fray for the deal included Korean Aircraft Industries (KAI) of South Korea, GROB Aircraft of Germany, EADS PZL of Poland, and Hawker Beechcraft of the US
Subsequently, India bought an additional 38 Pilatus trainers in 2015.
The CBI’s investigation relates to the purchase of the first batch of 75 Pilatus aircraft.
On Friday, the CBI searched nine premises including the residence and office of Bhandari in Delhi and elsewhere in the National Capital Region. The CBI has been investigating the case since 2016.
According to the CBI, its investigations showed that the Swiss company had entered into a service provider Agreement with Bhandari in 2010.
Pilatus Aircraft is alleged to have concealed the payments of 77,887,900 Swiss francs to Bhandari’s Offset India Solutions FZC during 2012 and 2015.
“It is suspected that the said commission amount was paid in order to influence the public servants of IAF, MoD and Government of India,” the CBI said in the first information report (FIR) it registered in connection with the case. HT has seen a copy of the FIR.
The CBI alleged that Pilatus had entered into “a criminal conspiracy” with Bhandari and Bimal Sareen, both directors of Offset India Solutions Private Ltd.
The service provider agreement it signed with Bhandari in June 2010 was in violation of the defence procurement procedure and inked to win the contract for the supply of 75 basic trainer aircraft to the Indian Air Force, it alleged.
Giving details of the alleged money trail, the CBI said Pilatus made a payment of 1,000,000 Swiss francs into a bank account of Offset India Solutions in New Delhi in two tranches in August and October 2010.
In addition, Rs350 crore was transferred in Swiss francs from 2011 to 2015 to the bank accounts of Dubai-based Offset India Solutions FZC, also belonging to Bhandar, it said.
“There is a strong suspicion that the aforementioned.. ..amount was the part of the commission amounts paid by Pilatus Aircrafts Limited to Bhandari to obtain the contract,” it alleged.
Apart from Bhandari, the CBI has also booked his companies Offset India Solutions Private Ltd and Offset India Solutions FZC, and his alleged associates have been booked by the CBI for criminal conspiracy, cheating and under provisions of Prevention of Corruption Act.
The Indian Air Force (IAF) did not officially react to the registration of the case and formal inquiry.
“If there is evidence, punish the guilty by all means, inquiry into wrongdoing is welcome; however, the process of modernization of the IAF should not suffer,” a senior IAF officer, who did not want to be named, said.
The IAF is going through a crucial phase of transformation and is looking to acquire new platforms and weapon systems to fill critical gaps and replace obsolete weapon systems. For instance, the IAF needs a minimum of 42 fighter squadrons for credible deterrence along the western and northern borders. It has just 30 fighter squadrons.