Air India Scam Embraer Jet Deal

The Times of India

10 September 2016 - Saturday

Payment made to UK-based agent: reports

Sao Paulo/ New Delhi: In yet another major defence scandal to hit the country after
the VVIP helicopter scam, prosecutors in Brazil and the US justice department are
now investigating alleged payment of bribes by Brazilian
aircraft manufacturer Embraer to swing deals with India and Saudi Arabia.
, Embraer is alleged to have paid commissions to a UK based defence agent - such
middlemen or unauthorized agents are banned under the Indian defence
procurement system -- in the $208 million deal for three EMB-145 jets inked by the
UPA government in 2008.
The threeEMB-145 aircraft have been equipped with indigenous radars in a Rs2,529
crore DRDO project to serve as AEW&C (airborne ear1y-warning and control
systems) air craft for IAF.
 The first modified aircraft
was delivered to DRDO in
2011, with the other two
following later: After several
missed deadlines, the AEW&C
project is now slated to be
completed by December
DRDO says it is not aware of
these developments, said the
defence ministry
spokesperson on Friday
Despite telephone calls and
text messages, DRDO chief S
Christopher did not respond
to questions.
Christopher; incidentally was the AEW&C programme director and head of the Centre
for Airborne Systems (CABS) before he was chosen to head DRDO in May 2015 by the
NDA government.

The Times of India

 10 September 2016 - Saturday

Brazi1s top newspapen the Folha de Sao Paulo, reported on Thursday that the
possible bribery in the 2008 Indian deal was imder the scanner of the US justice
department, which has been investigating Embraer since 2010, after a contract with
the Dominican Republic raised suspicion.
The scope of the investigation has now been widened to examine Embraers dealings
~ with eight other countries, including India and Saudi Arabia.
The newspaper
quoted Embraers
defence sales
manager Albert
Phillip Close as
stating thata former
sales director of the
company who served
in Europe told US
investigators that the
firm had contracted a
representative to
assist in the sale of
the surveillance
systems to India. As India prohibited hiring of defence agents, the representative was
hired in the UK for the purpose of striking the deal. The contract with that
representative would have been kept in a safe, with one key held by Embraer and
another held by the representative, said Close.
The Sao Paulo-based Embraen one of the largest manufacturers of commercial,
private and military jets in the world, has not publicly commented on the Indian deal.
But the Folha report said at least three company officials confirmed to the newspaper
that the Indian deal was being examined for corruption. The details of bribery
emerged in May this year when an employee with more than 30 years of experience
at the company made a plea-bargain agreement with the Brazilian federal public
prosecutors office, which is also been probing the allegations. The scale of the alleged
bribery or the identity of the UK-based agent is yet to be ascertained. In the case of
the Dominican Republic, a former defence minister and three others have been
arrested for allegedly accepting a $3.5 million bribe from Embraer.
The Dominican Republic deal, signed a year after India placed its order for the
three aircraft, was worth $94 million, less than half the amount of the Indian deal. TOI
spoke to some Embraer officials but they refused to officially comment on the
ongoing investigation.
A senior executive of the company however, said the investigation was in af
preliminary stage.
..Its all in the realm of speculation unless they reveal the identity of the agent in the
UK and establish that money was paid in bribes. India is an important market for us
and we would like to continue to do business there. Americans are our competitors in
certain sectors in India.. he said.
The 2008 deal was a major step in defence cooperation between India and Brazil. As
per a statement released by Embraer on July4, 2008, the contract signed with DRDO
included a comprehensive logistics package comprised training, technical support;
spare parts, and Ground support equipment.
Embraer has a strong presence in India with a total of 28 aircraft of different market
segments, including 21 executive jets.
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2019 General Elections
Mamata Banerjee for Prime Minister