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Brazilian aircraft manufacturer Embraer's deal with DRDO under bribery cloud

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NEW DELHI: Another big defence corruption probe is set to hit India. This time it's a joint US Brazil investigation into bribery charges against Brazilian aircraft manufacturer Embraer that has now been expanded to include the sales made to India.

While Embraer has also sold VVIP executive jets to the Indian Air Force, the deal likely to come under probe is a $210-million contract inked in 2008 with the Defence Research and Development Organisation (DRDO) for a project to develop a new range of early warning and control aircraft.

Authorities in the US and Brazil are probing charges that the company hired a middleman based out of England to bag the deal, a practice prohibited by Indian military procurement laws.


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Besides the Indian deal, the company's contracts in Saudi Arabia are also being probed, Brazilian newspaper Folha de SaoPaulo reportedon Friday.

The probe, which began in theUS under the Foreign Corrupt Practices Act (FCPA) in 2010, has already led to the arrest of the defence minister of the Dominican Republic last month on bribery charges in a military deal with Embrarer.

This was a result of investigation launched on the basis of the information US Department of Justice shared with Brazilian authorities.

Embraer, which has not denied the charges, told ET that it is cooperating with authorities on alleged violations, and confirmed that it has expanded an internal investigation.

"The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the market," an Embraer spokesperson told ET.
 
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NEW DELHI: Another big defence corruption probe is set to hit India. This time it's a joint US Brazil investigation into bribery charges against Brazilian aircraft manufacturer Embraer that has now been expanded to include the sales made to India.

While Embraer has also sold VVIP executive jets to the Indian Air Force, the deal likely to come under probe is a $210-million contract inked in 2008 with the Defence Research and Development Organisation (DRDO) for a project to develop a new range of early warning and control aircraft.

Authorities in the US and Brazil are probing charges that the company hired a middleman based out of England to bag the deal, a practice prohibited by Indian military procurement laws.

Besides the Indian deal, the company's contracts in Saudi Arabia are also being probed, Brazilian newspaper Folha de SaoPaulo reportedon Friday.

The probe, which began in theUS under the Foreign Corrupt Practices Act (FCPA) in 2010, has already led to the arrest of the defence minister of the Dominican Republic last month on bribery charges in a military deal with Embrarer.
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This was a result of investigation launched on the basis of the information US Department of Justice shared with Brazilian authorities.

Embraer, which has not denied the charges, told ET that it is cooperating with authorities on alleged violations, and confirmed that it has expanded an internal investigation.

"The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the market," an Embraer spokesperson told ET.


Read more at:
http://economictimes.indiatimes.com...ofinterest&utm_medium=text&utm_campaign=cppst
 
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Nothing new!
Keep calm wait for tender to be cancelled, remaining planes to be kept in a hangar like those VVIP choppers meanwhile IAF runs short of A/c. Its not as national security is important. We are not in a state of war anyways.:undecided:
 
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ANOTHER BS Article started with Rajat Pandit and now his Idiot!

Rajat Quote : "Embraer is alleged to have paid commissions to a UK-based defence agent -such middlemen or unauthorised agents are banned under the Indian defence procurement system -in the $208 million deal for three EMB-145 jets inked by the UPA government in 2008. The three EMB-145 aircraft have been equipped with indigenous radars in a Rs 2,520 crore DRDO project to serve as AEW&C (airborne early-warning and control systems) air craft for IAF.

Brazil's top newspaper, the 'Folha de Sao Paulo', reported on Thursday that the possible bribery in the 2008 Indian deal was under the scanner of the US justice department, which has been investigating Embraer since 2010, after a contract with the Dominican Republic raised suspicion."

Here is the Article from "Folha de Sao Paulo"

Where does it Mentions UK Based Defence agent?


Embraer Contracts with India and Saudi Arabia Are Targets of Investigation in the United States
09/08/2016 - 13h51

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WÁLTER NUNES
FROM SÃO PAULO

Investigations that have been opened by the government of the United States to establish whether Embraer paid bribes in order to obtain contracts abroad have affected deals that the Brazilian company closed with Saudi Arabia and India.

The company has been under investigation by the United States Justice Department since 2010 when a contract with the Dominican Republic raised the Americans' suspicions. Since then, the investigation has widened to examine business dealings with eight more countries.

Embraer is cooperating with the investigations and announced in July that it was expecting to reach a deal soon with American authorities. The company has put US$ 200 million (R$ 642 million) aside to pay any eventual fines that come about as a result of the process.

The company has not released details regarding the state of the investigations, but three people who have been following the case have confirmed to Folha that the deals concluded in Saudi Arabia and India are being examined.

In both cases, suspicions were underlined in May of this year when an employee with more than 30 years at the company reached a plea-bargain agreement in investigations being conducted by the Federal Public Prosecutor's Office here in Brazil.

Albert Phillip Close, Manager of Embraer's defense area, told Prosecutor Marcello Miller that he had heard a former sales director who worked in Europe admit to American investigators the payment of commissions to facilitate the sale of aircraft to the Saudis.

In November of 2010, the company announced the delivery of two Embraer 170 executive jets to the Saudi Arabian state-owned oil company Aramco. The amount of the deal was not announced at the time.

In the case of India, the plea bargainer said that Embraer had contracted a representative to assist in the sale of a surveillance system to the government.

In 2008, Embraer sold three EMB 145 AEW&C (Airborne Early Warning and Control) aircraft to the Indian government. The value of the deal was not announced at the time.

http://www1.folha.uol.com.br/intern...s-of-investigation-in-the-united-states.shtml

Original Investigation Started in 2011

Embraer Under Investigation by the U.S.
By Contributing Reporter on November 8, 2011

By Sarah de Sainte Croix, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The Brazilian aircraft manufacturer Embraer is under investigation by the United States Securities and Exchange Commission (SEC) on suspicion of violating the U.S. Foreign Corrupt Practices Act (FCPA). Embraer, the fourth largest producer of aircraft in the world, announced it was undertaking an internal investigation into its operations in three countries in response to the subpoena issued by the SEC.

Frederico-Curado-by-Bel-Pedrosa-for-the-World-Economic-Forum-Flickr-Creative-Commons-License-300x199.jpg

Embraer's CEO, Frederico Curado, announced that it was under investigation by the SEC, photo by Bel Pedrosa for The World Economic Forum/Flickr Creative Commons License.

The Foreign Corrupt Practices Act prohibits companies whose securities are listed in the U.S. from making payments to foreign officials “for the purposes of obtaining or retaining business for or with, or directing business to, any person.” It also requires that companies keep accurate records of all their transactions.

If found guilty of a criminal charge the company could face fines of up to, and possibly exceeding, US$2 million. Moreover, individual employees or directors within the company could be fined up to US$100,000 each and imprisoned for a maximum of five years.

The sanctions also dictate that firms found to be in violation of the FCPA could be banned from doing business with the U.S. Federal Government.

This could inhibit Embraer’s reported bid to win a nearly US$1.5 billion deal to supply 100 light attack aircraft to the U.S. military. Frederico Curado, Embraer’s CEO, announced on Friday that he was “confident that it won’t prevent us participating in any bidding process.”

Embraer put forward their Super Tucano jets, which carry a price tag of between US$10-15 million. They are currently among the four finalists in the bidding, and if they win, the deal would not only represent their biggest single-sale of Super Tucanos ever, but also a way into the lucrative U.S. defense market.

Super-Tucano-by-Kfir2010-Wikimedia-Creative-Commons-License-300x199.jpg

An Embraer Super Tucano, photo by Kfir2010/Wikimedia Creative Commons License.

Despite an initial five percent drop in share prices on the Bovespa on Thursday following the news of the SEC investigation, the stock bounced back again on Friday to close up 4.4 percent at R$11.58 in São Paulo and up 3.45 percent at US$26.95 in New York.

One Brazilian commentator said, “Given that Embraer recorded a third-quarter loss on Wednesday, the cumulative effects of the SEC investigation could be complicated for the company if they are found to be guilty.”

The loss is reportedly due to the recent decline in the strength of the real and a series of delayed deliveries and cancelled orders for executive jets. Curado implied that the company might miss its revenue targets for this year by up to US$200 million, and executive jet deliveries could be down by about twenty due to the cancellations.

Embraer is among the world’s four biggest aircraft manufacturers after Airbus and Boeing, and in direct competition with the Canadian company Bombardier for the production of smaller commuter jets for short-haul regional flights.

Originally a Brazilian government entity, since its privatization in 1994 the company has become one of Brazil’s major manufacturing success stories with orders for aircraft totaling US$16 billion in the third quarter of this year and net profits of R$154 million in the second quarter.

- See more at: http://riotimesonline.com/brazil-ne...nvestigation-by-the-u-s/#sthash.TOFVjLzi.dpuf

Bottom Line is Reporting any it related to a defence scam in another COUNTRY that remotely link to india has become fashionable!:pissed:
 
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MOD has reacted to this already


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BTW thank god there is no hashtag yet.. Normally thats the way all of them spread the news.. So whats say #EmbraerScam or #EmbraerBribery or what not,,


@GuardianRED - yes you are precisely correct as newspaper did not mention anything about India. In the morning snippet i had got is an expansion of the probe to seek if anything suspicious linkage can crop up from Indian deal. This is bcz present investigations have not turned up enough evidence to say anything which is legally tenable.

So in all probability this is a bashing article bcz the reporter has jumped the gun. Its more to use the view that UPA is anyways corrupt so gullible masses will buy this news outright and accept this gospel truth without anything concrete which can be used by court of law or by MOD to take any actions.

Very soon this whole thing will be turned 180 degrees and will be said that MOD is trying to hush this up and DM MP is spineless and wont take any action to protect many people for some behind the scene deal. But all will negate its just expansion of the probe to gather linkages and proper evidences.


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No political party bashing Please. Keep the thread relevant..
 
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Thank god this investigation is initiated by foreign countries, not India! Now Congress can go crying 'Political Vendetta' to US & Brazil.
 
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Antony looks like most corrupt DM ever.

Anyway, this will not effect current AWCS programme as its nearing complition. All three planes are with us
 
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