New Delhi:
The Defence Ministry has ordered a bribery investigation over the purchase of jet engines from Rolls-Royce by the state-run Hindustan Aeronautics Limited (HAL) in a deal worth at least $1.2 billion or 7,400 crores.
The Central Bureau of Investigation will look into more than Rs. 500 crores in alleged kickbacks in the deal that was signed in 2011. For now, HAL has suspended a contract with Rolls Royce for the annual maintenance and repair of the aero engines fitted in nearly 70 Hawk advanced jet trainers, used to prepare Indian defense force pilots to fly next-generation fighter jets.
"We will cooperate fully with the regulatory authorities and have repeatedly made clear that we will not tolerate misconduct of any sort," said a Rolls-Royce spokesperson.
Suspicions of corruption in India's defence procurement programme have for years delayed the modernisation of India's armed forces, forcing a heavy reliance on outdated Soviet-designed equipment.
The air force has been dogged by a series of crashes of its Russian-built MiG fighter jets, while an accident aboard a Soviet-made submarine that killed two officers last week provoked the resignation of Admiral DK Joshi as the naval chief.
The probe into the HAL deal follows the arrest in Britain last month of Indian-born businessman Sudhir Choudhrie and his son in a bribery investigation by the Serious Fraud Office into Rolls-Royce's dealings in China and Indonesia.
Both men denied any wrongdoing and have been released on bail, their spokesman said last month.
While there was no indication that the latest probe was linked to the Choudhries, newspapers reported that HAL's "vigilance wing" had raised the alarm after hearing allegations that Rolls-Royce had hired consultants to advise on the deal.
Such lobbyists are explicitly banned under India's defence procurement system.
India had ordered a total of 123 twin-seater Hawks from BAE Systems so far, with 24 to be supplied directly and the rest made under licence by HAL, according to the British defence and aerospace group.