Leaked documents point to millions of dollars that were paid by several foreign defence companies to entities tied to an alleged Indian middleman, Sudhir Choudhrie, for securing high-profile arms deals with India, according to documents seen by several media outlets.
The documents, which were first accessed by the Guardian and the BBC, shed light on alleged payments including about 100 million Euros or about Rs 730 crores made by Russian defence companies such as MiG Corp to firms held by Choudhrie's family in 2007-2008; and another GBP 10 million paid by British giant Rolls-Royce, which is a maker of engines in the Hawk advanced trainer aircraft used by the Indian Air Force, the Hindu reported.
Choudhrie, who is now a resident in the UK and who was previously investigated by the CBI and later cleared, has denied the allegations via his legal counsel. His lawyers reportedly said he "never paid bribes to government officials or acted as an illegal middleman in defence deals." Two years ago Choudhrie and his son Bhanu were arrested as part of UK's Serious Fraud Investigation Office investigation into Rolls-Royce, but were also later released without any charges.
According to an ET report, companies linked to Choudhrie's son Bhanu and a close relative also once appeared in CBI's blacklist of "undesirable" middlemen. However, Choudhrie' s legal representatives have denied knowledge of such a list.
Russian defence firms that allegedly made the payments include airplane manufacturer MiG Corp, Rosoboronexport, an arms dealer, and NPO, reported the ET.
According to an 2008 internal inquiry commissioned by Swiss bank Credit Suisse, which reportedly looked into certain suspicious payments, about 18 Choudhrie family group accounts allegedly received payments through bank accounts located in Seychelles, Zurich and Panama, reported BBC's Panorama, which has seen the confidential Credit Suisse report. Choudhrie's lawyers have denied knowledge of such an internal report and said any suggestions they were illegal were defamatory.
The Credit Suisse report described the payments as "incoming funds from clients offset business." Offsets are typically negotiated by countries while purchasing foreign defense equipment, requiring them to invest a certain percentage to a local provider to boost domestic manufacturing. Recently, India's Rafale jet deal with Dassault Aviation included an offset JV contract for Anil Ambani's Reliance Group.
According to The Guardian, a first tranche of the complicated Hawk deal contracts, was inked in 2004, followed by a second in 2010, for a total value of about GBP2.1 billion. The Guardian also reported a Rolls Royce source as saying the firm had worked with the Choudhries and the related companies during this period.
"You had to work your way and it took time," the Rolls-Royce source told the Guardian. "We needed to have Indian partners or a sister company in India."
The source also told the Guardian that local "fixers" would help arrange the deals before senior company official completed the deals.