TAP TO UNMUTE Photo Credit: Indiatimes, Representative Image

After AgustaWestland, and several other scams, the 2008 UPA regime is once again embroiled in a possible defence scandal, this time it’s over a deal with Brazilian aircraft manufacturer Embraer, that took place during that time.

According to reports, prosecutors in Brazil and the US justice department are now investigating alleged payment of bribes by Embraer to swing deals with India and Saudi Arabia.

It has been alleged that Embraer paid commissions to a UK-based defence agent, violating the contract, which stated that no agents or middlemen should be involved under the Indian defence procurement system.

The UPA government inked the deal to purchase three EMB-145 jets for $208 million in 2008. The three EMB-145 aircraft have been equipped with indigenous radars as part of the Rs 2,520-crore DRDO project to serve as AEW&C (airborne early-warning and control systems) aircraft for IAF.

The first "modified" aircraft was delivered to DRDO in 2011, with the other two following later. After several missed deadlines, the AEW&C project is now slated to be completed by December.

Defence Minister Manohar Parrikar said that he has spoken to DRDO chief and asked him to seek details from Embraer on the following aspects:

1. He has asked DRDO to speak to Embraer and get a clarification on the media reports.

2. Parrikar has also asked DRDO for a report on the deal.

3. Internal papers that relate to 2008 are being pulled out to see if there is any paper trail that leads to the midddlemen.

In response to the alleged scandal, a Defence Ministry spokesperson said, "DRDO says it is not aware of these developments.”

Meanwhile, when TIMES NOW asked DRDO chief S Christopher about the scam, he said, “The laboratory officials dealing with Embraer have written to the Brazilian aircraft manufacturer asking for details. We have quoted the contract saying that if you have engaged a middleman, you have to tell us in 15 days. Please tell us if you have or not.”

It must be noted, Christopher, incidentally, was the AEW&C programme director and head of the Centre for Airborne Systems (CABS) before he was chosen to head DRDO in May 2015 by the NDA government.

Additionally, Brazil's top newspaper, the 'Folha de Sao Paulo', reported on Thursday that the possible bribery in the 2008 Indian deal was under the scanner of the US justice department, which has been investigating Embraer since 2010, after a contract with the Dominican Republic raised suspicion.

The scope of the investigation has now been widened to examine Embraer's dealings with eight other countries, including India and Saudi Arabia.

The newspaper quoted Embraer's defence sales manager Albert Phillip Close as stating that a former sales director of the company who served in Europe told US investigators that the firm had contracted a representative to assist in the sale of the surveillance systems to India.

As India prohibited hiring of defence agents, a representative was allegedly hired in the UK for the purpose of striking the deal.

"The contract with that representative would have been kept in a safe, with one key held by Embraer and another held by the representative," said Close.

AK Antony, who was the Defence Minister in 2008, also spoke to TIMES NOW on the alleged scandal. He said, "It is for this (NDA) government to verify and inquire. I have nothing more to say."

The Sao Paulo-based Embraer, one of the largest manufacturers of commercial, private and military jets in the world, has not publicly commented on the Indian deal. But the Folha report said at least three company officials confirmed to the newspaper that the Indian deal was being examined for corruption.

The details of bribery emerged in May this year when an employee with more than 30 years of experience at the company made a plea-bargain agreement with the Brazilian federal public prosecutor's office, which is also probing the allegations.

The scale of the alleged bribery or the identity of the UK-based agent is yet to be ascertained. In the case of the Dominican Republic, a former defence minister and three others have been arrested for allegedly accepting a $3.5 million bribe from Embraer.

The Dominican Republic deal, signed a year after India placed its order for the three aircraft, was worth $94 million, less than half the amount of the Indian deal. When TNN spoke to some Embraer officials, they refused to officially comment on the ongoing investigation.

A senior executive of the company, however, said the investigation was in a preliminary stage. "It's all in the realm of speculation unless they reveal the identity of the agent in the UK and establish that money was paid in bribes. India is an important market for us and we would like to continue to do business there. Americans are our competitors in certain sectors in India," he said.

The 2008 deal was a major step in defence cooperation between India and Brazil. As per a statement released by Embraer on July 4, 2008, the contract signed with DRDO included a "comprehensive logistics package comprising, technical support, spare parts, training, technical support, spare parts, and ground support equipment".

Embraer has a strong presence in India with a total of 28 aircraft of different market segments, including 21 executive jets across six different models. The company has emerged as the market leader, delivering 35% of the total executive jets in India over the last five years.