india

Updated: Jul 17, 2019 07:36 IST

The defence ministry has suspended business dealings with Swiss plane maker Pilatus Aircraft Limited (PAL) for a year over the violation of a pre-contract integrity pact (PCIP) in a ₹2,900 crore contract for 75 basic trainer aircraft. Its decision was also influenced by an ongoing investigation against PAL for alleged corruption and irregularities. In an order uploaded on its website on Monday, the ministry said the move is in line with the government’s guidelines for penalties for violations of integrity in such deals.

The IAF has launched a fresh global hunt for basic trainers as the Central Bureau of Investigation (CBI) is probing the deal with the firm for 75 of those aircraft over alleged corruption and irregularities, that report said.

The 2012 contract contained a clause for a follow-on purchase of 38 more planes. The government had earlier asked the IAF not to pursue the follow-on option, keeping the investigations against the firm in mind.

The CBI last month booked unnamed officials of the IAF and defence ministry, PAL and absconding arms dealer Sanjay Bhandari for allegedly influencing the 2012 deal.

The agency alleged that the plane maker deposited a million Swiss francs in the account of Offset India Solution Private Limited or OISPL (of which Bhandari is a director) in two tranches in 2010. The Enforcement Directorate and Income Tax department are also investigating the firm.

The ministry’s order said Pilatus submitted a duly signed PCIP in November 2010 in connection with the 75 aircraft deal, but later admitted in 2017 that it had engaged OISPL for its services and also paid it a million Swiss francs. The ministry found Pilatus’s reply to a show-cause notice in June 2017 unsatisfactory.