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ED starts money-laundering probe against Rolls-Royce

ED starts money-laundering probe against Rolls-Royce

New Delhi: The ED has registered a money-laundering case against Rolls-Royce Plc and its Indian subsidiary in connection with an alleged corruption case, where the London-based engineering company paid "commissions" to a Singapore-based company, Aashmore Pvt Ltd, in order to secure contracts worth over Rs 4,700 crore from Hindustan Aeronautics Limited (HAL).

The Enforcement Directorate has taken cognisance of the corruption case, initially filed by the CBI, to investigate under the provisions of the PMLA, whether there were instances of money-laundering as a result of the alleged corruption.

The CBI had earlier this year filed a case against Rolls-Royce and a subsidiary, alleging that the commissions were also paid to Aashmore to secure contracts of supplying spare parts to ONGC and GAIL.

The preliminary enquiry by CBI had revealed that Rolls Royce paid up to Rs 76.22 crore in commissions to companies related to Ashok Patni, Director of Aashmore, for securing contracts with HAL, GAIL, and ONGC between 2007 and 2011. As per the central probe agency, parts of these commission payments were allegedly used to pay kickbacks to officials of HAL, GAIL, and ONGC, who were involved in the procurement process.

The ED will now look into these alleged corrupt practices to see whether they led to the creation of a complex web of shell companies to launder the alleged proceeds of crime.

The financial probe agency will also look into whether the integrity pact between Rolls-Royce and these three government organisations was violated, trying to look for how and through where kickbacks were generated.

After the CBI case came to light, Rolls-Royce had said that it will not tolerate business misconduct of any sort and is committed to maintaining high ethical standards, adding that no one "currently working" for Rolls-Royce India played a part in these energy deals.

"India is an important market for Rolls-Royce and the company has a valued workforce of skilled people in the country," a company spokesperson had said at the time.

The CBI's FIR was converted from a Preliminary Enquiry, registered in 2014 and subsequently, two more PEs were registered by the probe agency against Rolls-Royce.

In fact, the CBI said that it had requested Aashmore to provide bank account details in which these commissions were allegedly received, several times. But, the Singapore-based firm allegedly refused to cooperate. The probe agency said that this non-cooperation from Aashmore, "shows that Aashmore Pvt Ltd is hiding the corrupt public servants of HAL, ONGC, and GAIL involved in the process of procurement and illegal gratification".

As per CBI's probe, an Energy Maintenance, Repair, and Overhaul Centre Agreement was signed between Rolls Royce and HAL in June 2007.

According to this agreement, HAL was to provide maintenance, repair and overhaul services for GAIL and ONGC, with spare parts purchased from Rolls Royce.

However, the CBI alleged that Rolls Royce had engaged Patni in violation of the terms of the agreement and paid his company Aashmore commissions ranging from 10-11 percent of the total value of the purchase orders. Between 2007-2011, Rs 18.32 crore was paid to Aashmore's accounts.

Moreover, in a similar manner, Rolls Royce had engaged the services of Patni, allegedly in violation of the terms of agreement with ONGC and GAIL respectively.

In ONGC's case, Rolls Royce had allegedly paid Rs 29.81 crore to Aashmore in exchange for securing 73 purchase orders from the public service undertaking, with the CBI alleging that Patni's services were kept a secret to "conceal the illegal payments made to Aashmore". Rolls Royce was supposed to declare any Indian agent and the commission payable to them upfront, according to its deal with ONGC.

In fact, as part of this deal, Turbotech Energy Services International, another company related to Patni had allegedly paid Rs 10 lakh to ONGC Officers Mahila Samiti.

Furthermore, Rolls Royce allegedly paid almost GBP 1 million to Patni's Aashmore, in exchange for up to 68 purchase orders placed by GAIL, between 2007-2010. According to the CBI, the total amount paid in commission for projects with GAIL come up to around Rs 28.09 crore.

According to the CBI's FIR in the case, Rolls Royce had allegedly engaged in the payment of commissions to companies related to Ashok Patni, in order to pay kickbacks to public officials of GAIL, HAL, and ONGC who were in charge of the procurement of services.

The probe agency has accused the British engineering company of conspiring with its Indian subsidiary to misrepresent facts before all three public service undertakings, which kept placing purchase orders with them. Moreover, the CBI has also alleged correspondence about Rolls Royce supply orders between ONGC, GAIL officials and Patni.

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