Embraer Admits It Paid 'Agency' $5.76 Million To Secure Indian AEW&C Contract

Embraer has admitted in paying $5.76 Million after it entered into an agreement with an agency in India’s 2008 three modified Airborne Early Warning & Control (AEW&C) aircraft deal.

The deal was to purchase three modified aircrafts from Embraer for installation of Defense Research and Development Organization (DRDO) developed mission system to develop indigenous AEW&C System. 

There were media reports on alleged involvement of Agents in the deal. Therefore, DRDO asked for clarification from Embraer based on the media reports. 

Embraer, in their reply, admitted that they had paid a sum of $5.76 Million to the Agency, Minister of State for Defence Subhash Bhamre said in the upper house of the Parliament Tuesday. 

CBI sources had said in October this year that a case has been registered against a UK based NRI whose named had also figured in another defense deal probed by the agency.

They said the kickbacks were allegedly paid in 2009 through subsidiaries of Embraer via a Singapore based company which is owned by the middleman.

It is alleged that payoffs were routed through Austria and Switzerland.

The Indian Defense Ministry had asked the Central Bureau of Investigation (CBI) to probe in $208 million Embraer aircraft deal after allegations of payment of kickbacks in September this year.

The deal for purchase of three Embraer aircraft during the UPA regime has kicked up dust with the US authorities going into alleged payment of kickbacks.

The company has been under investigation by the US Justice Department since 2010 when a contract with the Dominican Republic raised the Americans' suspicions, the report said.

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

DRDO has already sought a report from the Brazilian firm, which has said it has been looking into graft allegations over the last five years.

A Brazilian newspaper recently alleged that that the company had taken the services of middlemen to clinch deals in Saudi Arabia and India.

According to defence procurement rules of India, middlemen are strictly barred in such deals.