Middlemanpaid $5.5 million in Embraer deal: CBI

Preliminary CBI investigations have revealed $5.5 million was allegedly paid as commission to a middleman based abroad in the 2008 purchase of three Embraer jets for the Defence Research and Develop-ment Organisation.

Without naming the middleman or the place where he could be based, CBI sources said the agency was in touch with that nation’s law enforcement agencies. The sources said that while only a preliminary enquiry was registered so far, it would soon be converted into a regular case if enough prima facie material was found.

The deal for three aircraft, to be used by DRDO for IAF’s airborne radar systems, was signed in 2008 with Embraer. The allegations of corruption surfaced in a Brazilian newspaper that alleged Embraer had hired middlemen to clinch deals in Saudi Arabia and India. India’s defence procurement rules strictly prohibit middlemen in such deals. Brazil’s Folha de Sao Paulo newspaper claimed Embraer had paid commissions to a UK defence agent to finalise the $208 million deal with India.

The newspaper also claimed the US justice department was scrutinising Embraer’s India deal. The company had been facing a US investigation since 2010 when a Dominican Republic contract had raised the Americans’ suspicions, it added.