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Files reveal links between Agusta, Embraer deals

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By Ashish Singh | NEW DELHI | 18 September, 2016 – The Sunday Guardian
ashish-embraer-story-edited-1The DRDO was not on board with the IAF over selection of the Embraer aircraft.
ashish-embraer-story-edited-2The CBI has registered a preliminary enquiry (PE) against unknown Ministry of Defence officials to probe the Embraer aircraft deal scam, in less than 12 hours after this correspondent revealed on NewsX the minutes of four meetings held in December 2006 to finalise the aircraft for the AEW&C project.

This correspondent has revealed that the Defence Research and Development Organisation (DRDO) was not on board with the Indian Air Force under then Air Force chief S.P. Tyagi over the selection of Embraer aircraft.

PE is the very initial measure taken by the CBI to examine any case before lodging a First Information Report (FIR) against suspected persons.

The CBI told this correspondent that “CBI has registered a PE (preliminary enquiry) against unknown officials of the Ministry of Defence (GOI) and others. This on a reference from the said Ministry on allegations related to M/s. Embraer employing an agent to facilitate various contracts. These include the contract for AEW&C project wioth CABS/DRDO for procurement of 3 aircraft”.

This correspondent has accessed the key 10-page documents that form part of the “Embraer files” that are being investigated by the CBI and the Enforcement Directorate. The documents contain the minutes of the four meetings held in December 2006 to finalise the aircraft for the AEW&C project.

In the first of the four meetings, held at Air Headquarter, New Delhi on 5 December 2006, the documents suggest, then Programme Director (AEW&C) Dr S. Christopher (who is currently the DRDO chief) had proposed two alternative options with different configuration and endurance for the aircraft as a platform for this project. He also pointed out that better options will be available with the change of aircraft. But the Air Force under S.P. Tyagi overruled Christopher’s arguments and stated that the DRDO will work with Embraer, the world’s third largest aircraft manufacturer that is now under the scanner of the US and Brazilian authorities for alleged kickbacks.

The Embraer files accessed by this correspondent reveal that four meetings had taken place on 5,6, 8 and 19 December 2006 among the Air Force officers, DRDO officials and the scientific adviser to the then Defence Minister, A.K. Antony.

“Dr. Christopher brought out that better options will be available with change of aircraft. The Chairman (the then Deputy Chief of Air Staff) stated that we need to work with EMB-145 and develop a prototype with the configuration that CABS will formulate and send to IAF for consideration”, stated the minutes that are available with this correspondent.

The minutes further state: “The Programme Director, AEW&C stated that CABS has proposed two options with different configuration and endurance. DCAS asked him to submit a clear proposal of what can be achieved with a 24T aircraft.”

The Defence Ministry is also expected to seek information from Brazil and the US through Indian defence attachés deployed in Indian embassies in the two countries.

According to the Brazilian newspaper Folha de Sao Paulo, Embraer had allegedly engaged a UK-based defence middleman and paid him kickbacks in order to ink the deal with India. Media reports further alleged that Embraer officials had paid commissions to middlemen in order to finalise similar deals in Saudi Arabia. The US Justice Department has been scrutinising Embraer’s deal with India.

The newspaper report claimed that the Brazil based company came under the US scanner after the US Justice Department smelled a rat in 2010 following the former’s contract with the Dominican Republic.

In 2008, a $208 million deal with Embraer was signed by the Defence Research and Development Organization (DRDO) for three ERJ-145 aircraft to build indigenous Airborne Early Warning and Control Systems for the Indian Air Force. The three aircraft were to serve as an air-borne radar system known as airborne early-warning and control systems or AEWCS for the Indian Air Force.

Significantly, the Embraer deal reminds one of the AgustaWestland VVIP helicopter scam due to the many similarities. Both Embraer and Augusta deals were inked when S.P. Tyagi was the Air Force chief and A.K. Antony was the Defence Minister.

Both deals were cleared between 2008 and 2010 despite alternative options being available. In both deals, UK based middlemen and aircraft company officials are allegedly involved.

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CBI will probe Embraer deal if evidence of criminality found, says Parrikar

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September 11, 2016 – THE HINDU
‘Will make a statement only after studying the DRDO report’

Defence Minister Manohar Parrikar on Sunday said he might recommend a CBI probe into the Embraer aircraft deal if it displayed “criminal nature” after the DRDO wrote to the Brazilian company seeking details of the deal involving three EMB 145 aircraft.

“I have directed the DRDO to send a complete report on the deal by Monday. I will study the report first before making any concrete statement on the issue but I can tell you as of now that if it displays criminal nature, I will hand over the case for CBI probe,” Mr. Parrikar told media persons in Vadodara.

He said: “If there were procedural issues, then an internal inquiry will be ordered.”

The deal

India has asked an explanation from the Brazilian aircraft-maker Embraer following media reports of an international investigation into the alleged payment of bribes to secure an aircraft deal in 2008.

A U.S.-Brazil investigation into the Embraer deal, uncovered a bribery case, leading to a deal between the company and DRDO in 2008.

According to Brazilian newspaper Folha de Sao Paulo, Embraer had been under investigation by the United States Justice Department since 2010 “when a contract with the Dominican Republic raised the Americans’ suspicions.”

India had signed a $208-million deal in 2008 for procuring three Emb-145 aircraft.

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CBI may probe Embraer deal, if needed, hints Parrikar

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ANI | Sep 11, 2016,- The Times of India
VADODARA: With the Defence Research and Development Organisation (DRDO) writing to Brazilian company Embraer, seeking details on a report that it employed an agent to sell three EMB 145 aircraft to the DRDO in 2008, defence minister Manohar Parrikar on Sunday asserted that if the issues display a criminal nature, then it will be handed over to the Central Bureau of Investigation.
Speaking to the media here, Parrikar stated he has asked the DRDO to submit a complete report on the matter on Monday, and it will be only after that that he can make a concrete statement.
“I am not going to give a knee-jerk reaction and just make a statement based on rumours. I have asked for a report, which will be submitted on Monday, and if the issues are of a criminal nature, then we can forward this case to the CBI for a criminal investigation. If there are just procedural issues, then we can do an internal investigation,” Parrikar said.
Admitting that he was himself unaware on several nuances of the issue since it happened in 2008, the defence minister reiterated that he will make a composite statement on the case only after he gets the report on Monday.
Meanwhile, the Bharatiya Janata Party (BJP) has asked the Centre to probe the aircraft bribery allegations linked to manufacturers of the Embraer.
A joint US-Brazil investigation into Embraer has uncovered a bribery case leading to a deal signed between the company and DRDO in 2008 for three aircraft equipped with indigenous radars for AEW&C (airborne early warning and control systems).
The company has been under the scanner of the United States Justice Department since 2010 after a contract with the Dominican Republic raised suspicions.
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After Agusta cloud, Embraer deal under scanner

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NEW DELHI, September 10, 2016 – THE HINDU

Brazilian aircraft major Embraer is alleged to have resorted to bribes, used middlemen to secure contracts.

Brazilian aircraft major Embraer is alleged to have resorted to bribes and used middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was done to a United Kingdom-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation for building indigenous Airborne Early-Warning and Control Systems aircraft for the Indian Air Force.
Brazilian aircraft major Embraer is alleged to have resorted to bribes and used middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was done to a United Kingdom-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation for building indigenous Airborne Early-Warning and Control Systems aircraft for the Indian Air Force.

India has asked an explanation from the Brazilian aircraft-maker Embraer following media reports of an international investigation into the alleged payment of bribes to secure an aircraft deal in 2008.

Embraer is alleged to have used bribes and involved middlemen to secure contracts in India and Saudi Arabia. In India’s case, the payoff was made to a U.K.-based middleman in the deal for three Embraer aircraft ordered by the Defence Research and Development Organisation (DRDO) for building an indigenous Airborne Early Warning and Control Systems (AEW&C) aircraft for the Indian Air Force. A Defence Ministry spokesperson said on Saturday that the DRDO sought an explanation and details from the manufacturer within 15 days.

Under watch since 2010

According to Brazilian newspaper Folha de Sao Paulo, Embraer had been under investigation by the United States Justice Department since 2010 “when a contract with the Dominican Republic raised the Americans’ suspicions.”

“Since then, the investigation has widened to examine business dealings with eight more countries,” the report said.

The newspaper reported that the company was cooperating in the investigations, and “is expecting to reach a deal soon with American authorities” and has even set aside $200 million to pay “any eventual fines that come about as a result of the process”.

The newspaper has quoted Albert Phillip Close, manager of Embraer’s defence area, as having admitted to the authorities as part of a plea bargain that in the case of India, the aircraft major had contracted a representative to assist in the sale of a surveillance system to the government.

$208-million deal in 2008

India had signed a $208-million deal in 2008 for procuring three Emb-145 aircraft. The planes were delivered beginning 2011 and the project is now nearing completion after a series of delays.

This is the second major defence deal under the scanner after the VVIP chopper case involving Agusta Westland and both the deals were signed by the previous United Progressive Alliance government.

Indian defence procurement prohibits the employment of middlemen in defence deals.

The Defence Ministry spokesperson when asked about the reports said the DRDO will seek explanation and details from manufacturers of Embraer aircraft on media reports on the 2008 deal.

“On receipt of information by the DRDO, further steps may be initiated,” he said.