Rolls-Royce’s Indian Jet Engine Bribes
Introductionscroll to contents
The multi-jurisdiction investigation into Rolls-Royce’s extensive history of paying bribes, prompted by a whistleblower’s allegations in 2012, included one major defense deal. According to investigations in India and the United Kingdom, the British engine-manufacturing company used a series of agents to secure a contract in India for trainer-aircraft jet engines. The GBP 200 million (USD 310 million) contract, finalized in 2010, was backed by more than USD 17 million in bribes paid through arms broker Sudhir Choudhrie and a consultancy, Aashmore Private Ltd. Likely due to India’s long history of cooperation with Rolls-Royce on jet engines, Prime Minister Narendra Modi’s government has not blacklisted the firm.
Case detailsscroll to contents
Dramatis Personaescroll to contents
Sudhir Choudhrie – London-based arms broker; suspected of involvement in defense-sector corruption in India since the late 1990s; identified as likely conduit for bribes.
Ashok Patni – director of Singapore-based firm Aashmore Private Ltd. Admitted agent of Rolls-Royce for civil business deals; implicated by Indian investigators in the Hawk engines bribery scandal.
Summary of Corruption Allegationsscroll to contents
Allegations of bribery by Rolls-Royce. The allegations were later proven by an internal Indian Ministry of Defence inquiry and a BBC report.
Timelinescroll to contents
Rolls-Royce agreed to supply the Indian Navy and Air Force with 57 Hawk Advanced Jet Trainer aircraft.
The Indian Minister of Defence, A.K. Anthony, asked the country’s Central Bureau of Investigation (CBI) to investigate whether Rolls-Royce had paid bribes to secure any contracts with the Indian military. The investigation was originally prompted by a whistleblower, but Rolls-Royce was quick to admit that it had employed a middleman, Ashok Patni, and his firm Aashmore Private Ltd. as a “commercial advisor.”
BAE Systems and Hindustan Aeronautics signed an agreement to develop an updated, combat-capable version of the Hawk trainer.
- Nov 2016
A BBC Panorama report released that month brought to light new evidence that Rolls-Royce had employed Sudhir Choudhrie, an arms broker resident in the United Kingdom and implicated in many investigations stretching back decades, to secure the Hawk trainer deals. Shortly thereafter, Indian media reported that an internal Ministry of Defence inquiry into the 2014 allegations, submitted to minister Manohar Parrikar a few months before, had reached the separate conclusion Rolls-Royce’s previously disclosed payments to Aashmore had also been used to secure the Hawk deal.
Investigation Outcomesscroll to contents
- Jan 2017
Under the terms of a deferred prosecution agreement with the UK Serious Fraud Office, Rolls-Royce agreed to pay a total of nearly GBP 500 million in returned profits and penalties, stemming from illegal activity in seven countries.
- Feb 2017
The Indian Air Force announced that it would not buy any units because of the ongoing investigations into Rolls-Royce. Nonetheless, the company has not yet been blacklisted.
Referencesscroll to contents
World Peace Foundation - Compendium of Arms Trade Corruption, https://sites.tufts.edu/corruptarmsdeals/rolls-royces-indian-jet-engine-bribes/
“Rolls-Royce finalises contract for additional Adour-powered Hawks for India,” Rolls-Royce Press Release, July 28, 2010, http://www.rolls-royce.com/media/press-releases/yr-2010/additional-adour-powered-hawks-for-india.aspx.
“BAE, Rolls-Royce ink India Hawk jet deal,” Business Standard (online), Jan. 20, 2013, http://www.business-standard.com/article/companies/bae-rolls-royce-ink-india-hawk-jet-deal-110072900090_1.html.
“India to investigate suspected kickbacks in Rolls-Royce deal,” Reuters, Mar. 3, 2014, http://www.livemint.com/Politics/xjG2uVnm6lWugDK7I3tYNI/India-to-investigate-suspected-kickbacks-in-RollsRoyce-deal.html.
Rupert Neate, “Rolls-Royce faces fresh bribery allegations in India,” The Guardian (online), Mar. 3, 2014, https://www.theguardian.com/business/2014/mar/03/rolls-royce-bribery-allegations-india.