Def Min puts all deals with Rolls Royce on hold

The Defence Ministry has put on hold all existing and future deals with Rolls-Royce pending a Central Bureau of Investigation (CBI) probe ordered into allegations of bribery and engaging middlemen in contracts worth Rs 10,000 crore for supply of aircraft engines to state-owned Hindustan Aeronautics Limited (HAL).  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 a news agency here. The decisions were taken even as Rolls-Royce in a letter written to HAL in December last admitted it had employed a Singapore-based person identified as Ashok Patni and his firm Aashmore Private Limited as ‘commercial advisor’ in India, providing sales and logistical support, local business support and ‘strategic advice.’  The firm has informed HAL that it has paid commissions to Aashmore Private Limited for clinching clinch military deals and the amount ranged between 10 and 11.3 per cent, sources said. HAL and Aashmore Private Limited have transacted business worth over Rs 5,000 crore between 2007-2011, they said. Contracts with Rolls-Royce have been put on hold pending the CBI inquiry into the matter, defence ministry sources said. The commissions paid by the firm are in violation of the procurement rules in India which prohibits hiring of middlemen or commission agents.