New Delhi: Twelve years after India signed a deal with Brazilian aircraft maker Embraer for the supply of three fully modified EMB-145 aircraft for Airborne Early Warning and Control (AEW&C), the Enforcement Directorate (ED) has filed a charge sheet alleging that the company paid commission worth $5.6 million (around ₹41 crore according to Wednesday’s forex rates) in return for a $210 million (around ₹1,544 crore) contract.
According to ED’s investigation, shared by an officer at the agency on condition of anonymity, Embraer entered into an agreement with alleged middleman, NRI arms dealer Vipin Khanna, in 2005 for his services at a commission of 9%, three years before the contract with IAF was signed (on July 3, 2008).
The agency has named in its charge sheet Embraer SA, and companies and individuals used for routing the money including Singapore based firm -- Interdev Aviation Services Pte. Ltd, KRBL Ltd , which is one of the largest Basmati rice exporting firms and whose brands include India Gate basmati rice, its joint managing director Anoop Kumar Gupta, his nephew Anurag Potdar, and others, under the Prevention of Money Laundering Act (PMLA).
In a statement to the stock exchange late on Wednesday, KRBL termed the allegations “false, frivolous and baseless”.
{{/usCountry}}In a statement to the stock exchange late on Wednesday, KRBL termed the allegations “false, frivolous and baseless”.
{{/usCountry}}The Central Bureau of Investigation (CBI) registered a case in October 2016 against unknown officials of DRDO (Defence Research and Development Organisation), Embraer, Vipin Khanna and other unknown persons on the basis of which ED had initiated its money laundering probe in the case.
The allegation is that Khanna received $5.6 million from the Sao Paulo based firm in return for influencing the ministry of defence (MoD) and DRDO officials for the contract to supply three fully modified EMB-145 aircraft to the Government of India as a platform for the Airborne Early Warning and Control (AEW&C) project.
In September 2016 , Brazilian newspaper Folha de Sao Paulo reported that Embraer was under investigation by the US Justice Department since 2010 over a contract with the Dominican Republic.
According to details accessed by HT, Embraer entered into an agency agreement with Khanna’s company, Cleveden Limited, somewhere around February 8, 2005 for his services at a commission of 9%.
“This agreement was kept in a safe box in London. Three years later, Embraer signed a contract with IAF (on July 3, 2008) for providing three highly specialised military aircraft for approximately $ 210 million. The very next day, Vipin Khanna contacted Embraer and demanded his commission,” said an ED officer.
ED said in a statement on Wednesday that its probe has established payment of commission by Embraer.
It said “the kickbacks were routed by M/s Embraer SA through its subsidiaries to M/s Interdev Aviation Services Pte Ltd, Singapore in lieu of sham agreement.”
“The kickbacks to the tune of around USD 3.275 million were further routed from M/s Interdev Aviation Services to M/s KRBL DMCC, Dubai (a 100% owned subsidiary of KRBL Ltd) in lieu of sham agreement to finally reach India through M/s KRBL Ltd projecting the same as untainted money. Further, investigation revealed that Anoop Kumar Gupta, Director of KRBL Limited, signed the sham agreement held between Interdev Aviation Services and KRBL DMCC (Dubai) to receive Proceeds of Crime (PoC) which were finally received in the bank account of KRBL Ltd in which he is one of the directors,” ED statement said.
The agency has, so far, attached immovable properties worth ₹16.29 crore belonging to KRBL in the case.
“At the outset we would like to state that the allegations leveled by the Enforcement Directorate are false, frivolous and baseless. KRBL Ltd has not entered into any sham agreement with any entity. We have been cooperating with the entire investigation by the Enforcement Directorate for the last 3 years and have given all documents asked by the Enforcement Directorate, none of which in any way cement the allegations advanced by the Enforcement Directorate. The prosecution complaint has been filed by the Enforcement Directorate, only with the sole intention of attempting to justify its illegal attachment orders, wherein they have failed to take possession of the property due to the interference of both the Hon’ble Appellate Tribunal and the Hon’ble High Court. KRBL shall defend such actions of the Enforcement Directorate as it has done before and shall succeed in due course,” the KRBL statement said.
Email queries sent to Embraer were not answered. Interdev’s representatives and Khanna could not be located.