An investigation by BBC Panorama and the Guardian has revealed that British manufacturing multinational Rolls-Royce plc had employed middlemen to acquire defence contracts in 12 countries, including India. Russian arms firms have also paid almost Rs. 730 crore to the same Indian agent within a span of 12 months.
Alleged arms dealer Sudhir Choudhrie also received close to £10 million from Rolls-Royce plc, the company designs and manufactures engines for aviation and other industries. The amount was credited into firms linked to him. Choudhrie is an unregistered arms middleman, according to BBC and Rolls-Royce reportedly paid a large amount of cash to get a contract for manufacturing engines for Hawk aircraft.
However, Choudhrie's lawyer said that he has "never paid bribes to government officials or acted as an illegal middleman in defence deals." The manufacturing company also said that it has zero tolerance for bribery and corruption.
Bank documents shared with the Hindu show massive payments on October 2 2008 into accounts of companies belonging to the Choudhrie family. In India, it is illegal to pay unregistered middlemen for defence contracts.
He has been blacklisted in India and features in CBI's list of "Undesirable Contact Men." Ever since the Tehelka sting called Operation Westend, another arms deal with massive kickbacks, he has moved to London. Choudhrie has been investigated by both CBI and Enforcement Directorate.
The cash payment was made to Choudhrie's son, Bhanu, who reportedly went on a trip to Switzerland with arms executive Peter Ginger in 2007. Bhanu was paid hundreds of thousands of pounds, credited into a secret account called "Portsmouth" by Ginger. Bank documents accessed by BBC showed the balance to be more than 1 million Swiss francs.
Bhanu Choudhrie's lawyers told the BBC he has never been paid to secure deals for Rolls-Royce in India, including the sale of Hawk jets.
"Mr. Choudhrie has never paid any bribe to Mr. Ginger or anyone else", his lawyers said. "Mr. Choudhrie has no knowledge of what bank accounts have been set up or operated by Mr. Ginger or what sums (if any) he has deposited in them in cash."
Ginger was a key negotiator in the Hawk aircraft deal with the Indian government. The deal was worth £400m to Rolls-Royce.
Russian arms deals
Companies owned by the Choudhrie family have received millions from Russian arms dealers for brokering deals with India.
One of the companies received €39.2 million between October 2007 and October 2008, while another company received €32.8 million in the same period. A third company was paid €23 million.
The Swiss bank had found the payments suspicious and has launched an investigation. They were informed that these were offset payments, which are part of Indian defence deals. The problem being that the Choudhrie family and its companies were not registered offset agencies.