Defence minister AK Antony has ordered a Central Bureau of Investigation (CBI) probe into allegations that Rolls-Royce paid kickbacks of over Rs 10,000 crore to Indian officials between 2007 and 2011 to bag several military contracts.
In his eight-year tenure, Antony has handed over around 100 corruption cases to the CBI and blacklisted more than a dozen companies.
The latest move is expected to delay several Indian Air Force (IAF) projects.
According to defence ministry officials, Hindustan Aeronautics Limited (HAL) had received an anonymous letter, claiming that Rolls-Royce paid bribes to HAL and other officials to bag the engine contract for the Hawk Advanced Jet Trainer (AJT) aircraft.
An investigation by HAL's Chief Vigilance Officer (CVO) found some credence in the complaint and the matter was referred to the defence ministry, said an official.
The CVO's investigations, prima facie, found alleged violation of several contractual obligations between 2007 and 2011.
The Rolls-Royce 's Adour Mk 871 turbofan engine was supplied for the aircraft manufactured by HAL for the IAF, the officer said.
Company representatives could not be contacted.
The issue came to light after HAL issued queries to its vendors and suppliers to ensure probity in its transactions as part of its integrity pact to be signed with them, an official said.
Project Hawk AJT was stareted to cater to the IAF's long-standing requirement to bridge the gap between slow jet trainers such as Kiran and the advanced fighter aircraft currently in its inventory.
The need for AJTs was first felt by the IAF in 1982 after several crashes due to the lack of an advanced jet trainer. The IAF believed there existed a quantum difference in the skill and judgment levels of a young fighter pilot as he transited to state-of-the-art fighters like Su-30 MKI, Mirage 2000 and MiG-29.
HAL and IAF signed the contract in 2004. The Hawk -AJT was adequately serving as a lead-in trainer for these advanced aircraft.