The Central of Bureau of Investigation (CBI) has registered a preliminary enquiry (PE) to probe allegations of commission being paid to middleman in the supply of three aircraft worth $208 million. Brazilian company Embraer supplied the aircraft to Defence Research and Development Organisation (DRDO) for airborne surveillance systems.
CBI sources said the agency started a PE against unknown officials of Defence Ministry following a reference from the ministry that the company had used services of middlemen.
A preliminary enquiry is registered by the agency when the complaint doesn’t have enough material to substantiate a prima facie criminality in its allegations.
After registering the PE, the CBI examines various stakeholders, seeks material related to the matter to zero in on the criminality and then registers an FIR against the suspects. During a PE, the agency cannot record statements or carry out searches.
The allegations of commission being paid in the deal surfaced in a Brazilian paper, which claimed that Embraer had taken the services of middlemen to get the deal of aircraft supply in Saudi Arabia and India.
According to defence procurement rules of India, middlemen are strictly barred in such deals.
Leading Brazilian newspaper Folha de Sao Paulo had reported last week that Embraer paid commissions to a UK-based defence agent to finalise the $208-million deal with India.
DRDO had purchased three aircraft from the company in 2008 and customised them for serving as air-borne radar system known as airborne early-warning and control systems or AEWCS for the Indian Air Force.
The newspaper had claimed that the US Justice department was scrutinising Embraer’s deal with India.
The Brazil-based company has been under investigation by the US Justice Department since 2010 when a contract with the Dominican Republic raised the Americans’ suspicions, it said.
Since then, the investigation has widened to examine business dealings with eight more countries.
The allegations prompted the Defence Ministry to hand over investigation to the CBI. The DRDO has already sought an explanation from Embraer.
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