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The Enforcement Directorate (ED) has registered a case of money laundering in connection with the alleged payment of USD 5.7 million in kickbacks in the 2008 Embraer aircraft deal.
ED sources said that the agency has filed a criminal complaint under provisions of the Prevention of Money Laundering Act (PMLA) based on a CBI FIR filed in this case last month.
The agency will now begin issuing summons to the accused who could include those named in the CBI FIR.
The CBI had booked NRI arms dealer Vipin Khanna and two companies — Brazil-based Embraer and Singapore-based Interdev Pte Ltd — over alleged payment of commission in the aircraft deal with Embraer worth USD 210 million.
It is suspected that the kickbacks were allegedly routed from Embraer subsidiaries to Khanna through Interdev in three instalments of USD 1.92 million each in 2009.
The commissions in the deal, it is alleged, were routed through Austria and Switzerland.
A Brazilian newspaper had recently alleged that the aviation company had taken the services of middlemen to clinch deals in Saudi Arabia and India following which Defence Ministry had ordered an inquiry into the matter. Involvement of middlemen in defence deals is strictly barred under the Indian law.
The CBI had registered a preliminary enquiry in the case on September 16, 2016 at the request of DRDO to probe allegations regarding employment of an agent for facilitating the contract for Airborne Early Warning and Control System (AWACS) project for procurement of three fully modified EMB-145 Aircraft.
Embraer has been under investigation by the US Justice Department since 2010 when a contract with the Dominican Republic raised US suspicions, the report in the Brazilian newspaper said.
Since then, the investigation has widened to examine its business dealings with eight more countries. After the CBI Preliminary Enquiry was registered, Embraer had issued a statement saying: “Since 2011, Embraer has publicly reported that it has been conducting an extensive internal investigation and cooperating with the authorities on investigations regarding alleged violations of the FCPA.
“The company voluntarily expanded the scope of the investigation, systematically reporting the progress of the case to the market…The company is not party of the legal proceedings in Brazil. Therefore, it does not have access to the information contained therein,” it had said.