India-Embraer Jet Deal Signed in 2008 Under Scrutiny For Corruption

The US Justice and Brazilian prosecutors are investigating the bribery charges against Brazilian aircraft Manufacturer Embraer, including the sales made to India.

As the Brazilian defense company has also sold VVIP executive jets to the Indian Air Force, the deal is likely to come under probe is a $210-million contract signed in 2008 with the Defence Research and Development Organisation (DRDO) for a project to develop a new range of early warning and control aircraft.

The US and Brazil are probing the charges that the company hired a middleman based out of England to bag the deal, a practice prohibited by Indian military procurement laws.  Besides, the authorities are also probing the contracts that the company signed with Saudi Arabia.

The probe, which began in the US under the Foreign Corrupt Practices Act (FCPA) in 2010, has already led to the arrest of the defence minister of the Dominican Republic last month on bribery charges in a military deal with Embrarer as a result of investigation launched on the basis of the information US Department of Justice shared with Brazilian authorities.

Denying the charges, Embraer said that it is cooperating with authorities on alleged violations. The defense firm also confirmed that it has expanded an internal investigation. 

The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the market," an Embraer spokesperson said to The Economic Times Saturday.

On the contrary, the Brazilian media reported that, Embraer allegedly drew up a contract that hired a representative for the Indian deal and a copy of the contract was kept in a safe in England, with one key held by the Brazilian company and another by the representative hired. 

In July 2008, India signed a $210 million deal to acquire three Embraer 145 jets for its airborne early warning system program. As per the deal, the radar and other systems would be developed by DRDO and the Brazilian firm would help in integrating the system to the aircraft.