Singapore bizman admits receiving bribe in Embraer deal: CBI to court

Singapore-based businessman Dev Inder Bhalla, who testified before the agency last year, admitted that his firm, Interdev Aviation Services Pte, was used for routing the bribe money to India in the Embraer case, the CBI said.

A Singapore-based businessman received $5.76 million (around ₹45 crore according to latest rates) kickbacks from Brazilian firm Embraer at the behest of arrested lawyer Gautam Khaitan in the $210 million Embraer aircraft deal in 2008, the Central Bureau of Investigation (CBI) told a Delhi court last week.

A Singapore-based businessman received $5.76 million kickbacks from Embraer at the behest of arrested lawyer Gautam Khaitan. (Representative use)

Khaitan, who was earlier charged for allegedly routing money received from Anglo-Italian firm AgustaWestland in the 2012 chopper deal case, was arrested on August 25 and is currently in judicial custody.

Singapore-based businessman Dev Inder Bhalla, who testified before the agency last year, admitted that his firm, Interdev Aviation Services Pte, was used for routing the bribe money to India in the Embraer case, the CBI said.

The kickbacks were used by London-based arms dealer, late Vipin Khanna, to influence officials in the ministry of defence and secure a contract for supplying three EMB-145 aircraft to Defence Research and Development Organisation (DRDO), they added.

India signed a deal with Embraer for three fully modified EMB-145 aircraft for an Airborne Early Warning and Control project during the previous United Progressive Alliance (UPA) government.

In 2016, the CBI registered a case of bribery against unknown DRDO officials, Embraer, Khanna and unknown persons. The Enforcement Directorate (ED) later initiated a probe of money laundering into the case.

According to information available with HT, Embraer signed an agreement with Khanna’s Cleveden Limited in 2005 for his services at a commission of 9%. In November 2009, Embraer executed an agreement with Inderdev Aviation Services to make payments to Khanna through wholly-owned subsidy ECC Investment Switzerland AG.

Khaitan, meanwhile, allegedly involved a basmati rice exporting firm for bringing a certain amount of money to India, the agency had earlier said.

In a virtual examination on December 6, 2021, Bhalla “accepted that he received $5.76 million at the behest of Khaitan,” the agency said in its remand paper. HT has seen a copy of the document.

The Singapore businessman also said the agreement between his company and Embraer’s subsidiary in Switzerland for sending the commission of $5.76 million was vetted by Khaitan, who also coordinated with him for execution of agreements with a Dubai-based firm to route $3.27 million to India.

The probe, the federal agency said, revealed that “in order to secure the contract for supplying EMB-145 aircrafts as platform for Airborne Early Warning and Control (AEW&C) project from the DRDO, Sao Paulo based firm – Embraer SA – engaged non-resident Indian (NRI) middleman Vipin Khanna through a letter of agreement between M/s Embraer Representations LLC Delaware, USA (C/o Embraer SA, Brazil) and Khanna’s Cleveden Ltd in January 2005, whereby Embraer promised commission to Cleveden at 9% of the value of the defence contract obtained in India on a single vendor basis”.

Through his mediation, Khanna secured the contract for the aircraft maker, the CBI said.

An agreement between Embraer and the DRDO on July 3, 2008 for a consideration of $210 million. Khanna approached Embraer for his commission immediately after the contract was signed, they added.

Providing details on how Khaitan was linked to the bribe money from the beginning, the CBI said: “During February to July 2009, Jose Edurado Kury, a Brazilian counsel, and Gautam Khaitan, an Indian lawyer, visited the office of Embraer in Brazil and discussed the matter. Subsequently, Embraer paid $5.76 million in the account of Interdev Aviation (Singapore) through its Switzerland based subsidiary – ECC Investment Switzerland AG during January-February 2010.”

“The said amount was used by Khanna to influence the officials of ministry of defence to secure the contract for Embraer,” it said.

Of the $5.76 million, Interdev Aviation Services Pte transferred $3.27 million to KRBL DMCC, Dubai, (a firm belonging to Anoop Kumar Gupta who was arrested by the ED in the AgustaWestland case in January 2021), from where it was further transferred to KRBL Ltd, Delhi, in which Khaitan is one of the directors, the CBI said.

The agency, in its remand paper, also explained Khaitan’s role in routing the money.

“Investigation conducted so far has revealed that Khaitan was instrumental in execution of a false agreement (dated November 21, 2009) between Interdev and ECC (Switzerland) and another agreement (dated November 23, 2009) between Interdev and KRBL, Dubai, under the guise of facilitating sale of Embraer aircrafts to M/s Niki Luftfahrt GmbH, Austria,” the CBI said.

The agency sent a letter rogatory (LR) – a judicial request seeking information from another country – to Austria which ruled there were no intermediaries in the purchase of aircraft by Niki from Embraer, it added.

Bhalla, meanwhile, “admitted that he had not provided any service related to the aircraft deal between Embraer and Niki”. “He also stated no services were provided by him and by KRBL under the agreements,” the CBI said.

Bhalla has not been named in the case.

The CBI said it arrested Khaitan as he was not disclosing facts pertaining to financial transactions in the deal. While seeking his custody, the agency told the court that the accused’s interrogation was crucial to ascertain the role of public servants who were in touch with Embraer officials as well as to get details of his business associates in Singapore and Dubai.

Appearing for Khaitan, senior advocate Siddharth Luthra and advocate Madhav Khurana argued “there was no illegality or irregularity in the contract executed by the DRDO”.

Khaitan was apprehended malafidely as he had tendered only legal advice/services to the other entities, his counsels said.

“These are extremely frivolous allegations. He has been cooperating with the investigation,” Khurana told HT.

In 2019, Khaitan was arrested in the ₹3,727 crore AgustaWestland chopper case.

Embraer and KRBL did not respond to HT’s email queries for a comment on the matter.