The Central Bureau of Investigation has registered a case against UK-based arms dealer Vipin Khanna and abroad-based companies, in a case of alleged kickbacks worth over USD 5.70 million in connection with three aircraft deals signed with Embraer in 2008.
Sources from the CBI said Khanna, along with Brazil-based Embraer and Singapore-based Interdev Pte Ltd in connection with the deals totalling $208 million. They said the agency, which had registered a preliminary enquiry in September, has converted it into a regular FIR as enough prima facie material has been found by it to proceed in the case. A leading Brazilian newspaper had reported that Embraer had paid commuissions to a UK-based defence agent to finalise the deal with India. The three aircraft which were to be used by the Defence Research and Development Organisation, were bought in 2008 and customised for serving air-borne radar system for the Air Force. Defence procurement rules of India clearly state middlemen are strictly barred in such deals.
Khanna had faced CBI probe in a gun deal involing South African company Denel in which the agency had to file a closure report as it could not gather enough evidence from abroad. He had also faced a probe in the Barak missile deal with Israel and sale of arms to Pakistan. Sources linked to the case said it is alleged that the commission in the deal was routed through Austria and Switzerland.
Embraer has been under investigation by the US Justice Department since 2010, when a contract with the Dominican Republic raised US eyebrows. The company released a statement saying, "Since 2011, Embraer has publicly reported that it has been conducting an extensive internal investigation and cooperating with the authorities on investigations regarding alleged violations of the FCPA. The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the marker. The company is not party of the legal proceedings in Brazil. Therefore, it does not have access to the information contained therein."
