Rocked by a fresh scam in which Rolls Royce paid commission worth over `500 crore to bag contracts from Hindustan Aeronautics limited (HAl), the Defence Ministry has asked the CBI to unearth the money trail.
The Ministry has put on hold all future contracts with Rolls Royce on Monday after handing over the case to the CBI a day earlier and also ordered the HAl to recover money paid as commission.
The CBI will trace the money trail after allegations surfaced that commission was paid to some officials of HAl and other departments, officials said here on Tuesday adding the beneficiaries of these monetary transactions will also be investigated.
The period in which the commissions were allegedly paid is from 2007 to 2011 when deals worth over `5,000 crore were inked between Rolls Royce and HAl, they said. The commission ranging from ten per cent to 11.3 per cent was paid to a Singapore based intermediary Aashmore Private limited owned by Ashok Patni. Rolls Royce has admitted hiring him and “paying a certain percentage of purchase orders from HAl,” officials said. In a letter to HAl in December last year, UK-based Rolls Royce said “it had appointed a commercial advisor in India to provide sales and logistical support, local business expertise and strategic advise.”
Clarifying that the contract with the Singapore based company expired in January 2013, Rolls Royce, however, admitted that they had not made relevant declarations. These declarations have to be made as per the Indian Defence Procurement Procedure (DPP) which bars hiring of agents and paying commissions to bag contracts.
As regards the future contracts put on hold, officials said these pertain mostly maintenance of Rolls Royce fighter jet engines fitted in Hawk advanced jet trainers (AJT), C-130 J transport planes, Sea Harrier jets and Sea King helicopters used by the Navy besides engines supplied to run gas turbines of Oil and Natural Gas Commission (ONGC) and Gas Authority of India limited (GAIl). Some contracts in the pipeline also cover supply spare parts and other such equipment, they said.
India will also seek information from UK where the Serious Fraud Office is investigating bribery charges against Rolls Royce in cases related to China and Indonesia.
Reacting to the allegations, Rolls Royce has stated that it “will cooperate with the regulatory authorities and have repeatedly made clear that we will not tolerate misconduct of any sort.”