India

Embraer Jet Deal under scanner for alleged kickbacks

10 Sep 2016 | Written by Vijaya ; Edited by Gaurav
The 2008 Embraer Jet deal

The $210 million Embraer's 'Jet deal' with India came under scanner by the U.S. authorities for the payment of kickbacks to secure the contract.

The Brazilian aircraft manufacturer allegedly paid a middleman based out of the UK, to bag the deal with DRDO ('Defence Research and Development Organization').

Besides the Indian deal, Embraer's contracts in Saudi Arabia are also being probed.

In context: The 2008 Embraer Jet deal

The AgreementEmbraer - DRDO deal

In 2008, DRDO (Defence Research and Development Organization) inked a deal with Embraer, for 3 EMB-145 jets equipped with indigenous radars for Airborne Early Warning and Control systems (AEW&C).

According to the deal, DRDO was to "develop the radar, other systems while Embraer would assist in integrating the system into aircraft".

The first of these modified jets was delivered in 2011.

About Embraer

Established in 1969, Embraer is one of the world's largest aircraft manufacturers of commercial, private, and military jets. It is headquartered in Sao Paulo, Brazil.
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Embraer under investigation since 2010

Under the US watchEmbraer under investigation since 2010

Embraer was being investigated by the US Justice Department since 2010, after a military contract with Dominican Republic raised suspicion.

The probe under US' Foreign Corrupt Practices Act (FCPA) led to the arrest of Dominican Republic's defence minister on charges of bribery, in Aug 2016.

Embraer was alleged of its involvement in more such multi-country bribery deals including Argentina, India, Saudi Arabia, etc.

10 Sep 2016Embraer Jet Deal under scanner for alleged kickbacks

Yet another defence slip up under UPA regime

The Embraer scandal is yet another defence controversy to have hit India in recent times, after the AgustaWestland VVIP helicopter scam. Both the deals were made under the previous UPA regime.

10 Sep 2016Defence Minister seeks details from Embraer

Indian Defence Ministry said it sought details from Embraer over the controversy. The firm was asked to respond within 15 days.

DRDO said that it was not aware of any commissions paid for the deal and that 'further steps will be initiated after receiving response from Embraer'.

The bribery details first emerged in May 2016, from company's employee who revealed it to Brazilian authorities.

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11 Sep 2016Embraer sets aside $200m for fines related to India case

As Brazilian prosecutors and the US Justice Department began investigations into the company's alleged shady deal in India in 2008, the company is said to have set aside $200m for possible fines.

Sources said that Embraer is co-operating with the investigation and was expecting to reach a deal with authorities soon.

The company's dealings in Saudi Arabia and India are under the scanner.

29 Sep 2016CBI identifies Embarer middleman, may identify bribe recipients

The CBI disclosed that it has tracked down an individual who was paid $5.5 million by Embraer to secure the 2008 defence contract with DRDO.

The CBI did not disclose his identity, citing confidentiality clauses; they will also approach foreign law enforcement agencies for more information on the middleman.

The CBI said he could provide vital clues on Indian bribe takers.

21 Oct 2016Embraer deal: CBI registers FIR against UK arms dealer

The CBI has registered an FIR against a UK based NRI arms dealer, for allegedly receiving kickbacks from the 2008 Embraer Jet deal.

Sources said the person named in the FIR has figured in previous defence scam probes as well and took kickbacks worth $5.7 million for the Embraer deal.

The payoffs were allegedly routed through Austria and Switzerland.

25 Oct 2016Embraer to pay $205 million settlement over corrupt deal

To resolve the dispute over the corrupt 2008 Embraer aircraft deal, the Brazilian aircraft manufacturer will pay $205 million in fines to the US Justice Department.

The settlement relates to deals made in India, Saudi Arabia, Mozambique and the Dominican Republic; the fine includes 107 million in penalties and over $98 million in interest.

Apart from US, the settlement is also to Brazilian investigators.

08 Jan 2017CBI gets evidence from US on Embraer deal

The CBI retrieved evidence from the US, where the Department of Justice is conducting its own investigation into Brazilian aircraft manufacturer, Embraer.

CBI sources said the evidence would help in proving corruption charges against the company in India as well; the documents are currently being verified.

The CBI claims that $5.70 million was paid as bribes to secure Embraer's contract in India.

02 Mar 2017CBI questions alleged middleman in Embraer deal

The CBI questioned Vipin Khanna, defence consultant, in connection with the $208mn Embraer jet deal.

It was alleged that 87-year-old Khanna played the role of a mediator between the Sao Paulo-based company and ministry officials, by convincing them to sign the deal.

The money paid to Khanna is believed to have been routed through Austria and Switzerland. More beneficiaries are suspected in the deal.