The embattled Swiss aerospace manufacturer, Pilatus, has been banned by the Ministry of Defence (MoD) for one year. The ban came in the backdrop of the Central Bureau of Investigation (CBI) registering cases against Pilatus for allegedly bagging Rs 2,800 crore deal in 2012.
Last week, the Indian Airforce (IAF) abandoned its plan of buying 38 more Pilatus PC-7 MkII planes from Switzerland. The IAF will now go for a fresh tender for basic trainers. The cancellation of the plan is further expected to delay the induction of much-needed basic trainer aircraft.
The ban on Pilatus will force the IAF to find options to source spares and parts for its existing fleet of the basic trainers. The IAF is currently operating 75 Pilatus PC 7 Mk1 aircraft.
The official notification of MoD read: "Business dealings with the firm will remain suspended for a period of one year for violation of article 6.6 of the PCIP (Pre Contract Integrity Pact) and ongoing investigation by CBI, Delhi Police, ED and Income Tax Department into corrupt practices, unfair means and illegal activities by Pilatus Aircraft Limited."
MoD is acting tough on corruption charges against Pilatus and its partners in India. Last month, the ministry banned fugitive arms dealer Sanjay Bhandari who played a major role in brokering the deal for Pilatus. Bhandari is now being investigated by Indian agencies and declared absconding.
The Economic Times reported that MoD had sent a show-cause notice to Pilatus in 2017. The company admitted that they engaged with Bhandari's company Offsets India Solutions (OIS) and paid least 1 million Swiss francs in 2010. The payments were made for trainer jet for IAF.
The ban by MoD has further complicated matters for Pilatus, which is already under scrutiny at home. Switzerland's office of the attorney general has opened a criminal investigation in connection with the sale of military training aircraft to Saudi Arabia and the United Arab Emirates. However, the allegations were not specified the investigations were linked to alleged violations of Swiss law governing private security services.