Rolls-Royce’s Indian Jet Engine Bribes

World Peace Foundation - November 6, 2020 (updated August 10, 2023)
Image Caption: Two BAE Systems Hawks under assembly at Hindustan Aeronautics Limited’s facility in Bangalore, India, in February 2008. Image Source: Flickr/Creative Commons, Ajai Shukla.

Introduction

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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 details

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Seller country United Kingdom, France, India
Seller company Hindustan Aeronautics Limited, Rolls-Royce, Turbomeca (aka Safran Helicopter Engines)
Buyer country India
Goods category Aircraft Engines
Equipment sold 57 Adour Mk871 Jet Aircraft Engines
Deal value GBP 200 million (USD 310 million)
Sum involved in corruption INR 50 million (USD 1.1 million) and GBP 10 million (USD 16 million)
Start year 2010
End year 2017
Outcome status Out of Court Settlement

Dramatis Personae

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  • 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 Allegations

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Allegations of bribery by Rolls-Royce. The allegations were later proven by an internal Indian Ministry of Defence inquiry and a BBC report.

Timeline

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  • 2010

    Rolls-Royce agreed to supply the Indian Navy and Air Force with 57 Hawk Advanced Jet Trainer aircraft.

  • 2014

    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.”

  • 2015

    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 Outcomes

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  • 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.

  • 23 May 2023

    India’s Central Bureau of Investigations (CBI) filed a criminal complaint against Rolls-Royce Holdings PLC, senior executives of the company’s India unit, Sudhir Choudhrie, his son Bhanu, British Aerospace Systems, and some unnamed/unknown officials of the Indian Ministry of Defence, following a 2016-preliminary inquiry. The CBI alleged that “100 million were paid by Russian arms companies into a Swiss bank account in the name of Portsmouth, a company associated with Sudhir Choudhrie, with regard to defence deals with Russia for purchase of MIG fighter aircraft.”. The first information report claims that “Out of this amount, companies in the name of Choudhrie’s family — Belines Services Ltd., Cottage Consultant Ltd., and Carter Consultants Inc — received GBP 39.2 million, GBP 32.8 million and GBP 23 million, respectively, between October 2007 and October 2008.”

References

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