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ED Files Money Laundering Case Against Rolls-Royce

By LawStreet News Network      10 September, 2019 03:09 PM      0 Comments
ED Files Money Laundering Case Against Rolls-Royce

The Enforcement Directorate (ED) has registered a money laundering case against London-based Rolls-Royce Plc. and its subsidiary Rolls-Royce India Private Limited over alleged payment of over Rs 75 crore as commission to an agent to win contracts from public sector units like Hindustan Aeronautics Limited (HAL), Oil and Natural Gas Corporation (ONGC) and GAIL India between 2007 and 2011.

The development comes after the Central Bureau of Investigation (CBI) lodged an FIR against Rolls-Royce under the Prevention of Money Laundering Act, 2002, in July. "We have filed an ECIR on the basis of FIR filed by the CBI and started the investigation," said an official of ED to India Today.

The probe against Rolls-Royce started in 2014 after the Ministry of Defence asked the investigation agency to conduct a preliminary inquiry into the allegations. Subsequently, CBI booked Rolls-Royce and its Indian subsidiary, Singapore-based Ashok Patni and his company Aashmore Pvt Ltd, and Mumbai-based Turbotech Energy Services International Pvt Ltd, and unidentified officials of HAL, ONGC and GAIL for criminal conspiracy and bribery.

The FIR states that Rolls-Royce violated the integrity pact by paying 10-11 per cent commission of the total value of its contract (Rs 286.55 crore) with HAL between 2007 and 2011 to Patni's company. It also states that Roll Royce paid Patni's firm over Rs 18 crore as "commercial adviser" in the 100 supply of Avon and Allison engines' spare part orders to HAL between 2007 and 2011.

Further, HAL's engine division placed a purchase order to Rolls-Royce to the tune of Rs 4,455 crore between 2000 and 2013. However, the total value of the contract was worth Rs 4,700 crore. During this period, Patni was paid as Rolls-Royce commercial adviser in India, states the FIR. In its business with ONGC, Rolls-Royce paid commission on 38 transactions related to the supply of materials and spare parts between 2007 and 2011, the FIR said. As per the CBI, Rolls-Royce would have paid the commission worth Rs 75 crore to officials of HAL, ONGC and GAIL through Patni's Ashmore.

The ED will now be investigating the money laundering angle in the case, the officials said, adding it would also investigate whether the integrity pact was violated or kickbacks were involved.

After the registration of the FIR, the company had issued a statement saying that it would "respond appropriately". It assured it would not "tolerate business misconduct of any sort" and said no one working for Rolls-Royce in India played any part in these energy deals. "India is an important market for Rolls-Royce and we have a valued workforce of skilled people in the country," the company said.

(Source Business Today)



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