Govt puts contracts with Rolls Royce on hold, to recover money

Initiating punitive action, government today put on hold all existing and future deals with Rolls Royce pending a CBI probe into bribery allegations and decided to recover money paid as commission by London-based company.

India will also seek information from Britain where the Serious Fraud Office is investigating bribery charges against Rolls Royce in cases related to China and Indonesia.

Defence Ministry sources said contracts with Rolls Royce have been put on hold pending the CBI investigation ordered by Defence Minister AK Antony into allegations that bribes were paid in deals worth Rs 10,000 crore for supply of aircraft engines to the state-owned Hindustan Aeronautics Limited. Rolls Royce has supplied engines for six types of aircraft -- AJT Hawk, Jaguar, Avro, Kiran MK-II and Sea Harrier and Sea King Helicopters -- and IAF was to sign a contract with it for maintenance and overhaul of these. The HAL has also been asked to take action to recover from the London-based Rolls Royce the money paid by it to its commission agents, highly-placed Defence Ministry officials told PTI here.

The firm has informed HAL that it has paid commissions to Aashmore Private Limited for clinching military deals and the amount ranged between 10 and 11.3 per cent, sources said.
HAL and Rolls Royce have transacted business worth over Rs 5,000 crore between 2007-2011, they said.

In the first reaction by the company to the allegations, Rolls Royce spokesman said, "We will cooperate fully with the regulatory authorities and have repeatedly made clear that we will not tolerate misconduct of any sort."