Arms dealer Choudhrie held in London

UK SFO probing Rolls bribery scandal; ED studying his bank transactions.

Written by Manu Pubby | New Delhi | Published: February 15, 2014 1:02 am

Arms dealer Sudhir Choudhrie and his son Bhanu were arrested earlier this week by the UK Serious Fraud Office (SFO), which is investigating a bribery scandal involving defence and aerospace giant Rolls Royce. 

Choudhrie, who was in Delhi until recently, was arrested in London, and questioned on his association with Rolls Royce, which is under investigation for bribery in major deals in Asia, including two in China and one in Indonesia.

The UK-based firm is very active in India’s civil and military sectors, but no details have emerged yet of an Indian deal being under SFO probe.

Choudhrie got a clean chit from CBI in 2011 over a Rs-208 crore deal with Israel’s Soltam for the upgrade of artillery guns. However, the Enforcement Directorate is investigating several suspicious money transactions in recent years from bank accounts held by him and his wife.

“The allegations against Bhanu and Sudhir Choudhrie are strongly denied. Full cooperation is being given to the authorities,” a spokesperson for the Choudhries said, while referring to the SFO investigation.

Sources said the Indian investigation was focused on the illegal purchase of agricultural land by Choudhrie, and has identified three banks accounts held by the arms dealer and his wife based on a suspicious transaction report (STR) generated by the Financial Intelligence Unit (FIU) of the Ministry of Finance.

Choudhrie, a well known backer of the British Liberal Democrats, is the main promoter of the C&C Alpha group, which has multiple business interests in India and the UK.

“In connection with a Serious Fraud Office investigation, we can confirm a number of search warrants have been executed at various properties in London today. Two men were also arrested,” the SFO said in a statement issued on Wednesday. It did not name Choudhrie or his son.

CBI officials said on Friday that they would seek information about the arrests and the Choudhries’ alleged involvement in the crime from counterparts in the UK. The ED is likely to rope in the Customs Overseas Intelligence Network (COIN) for information on the investigation.

Rolls Royce has been accused of bribing the son of former dictator Suharto with $ 20 million and a Rolls car to facilitate the purchase of engines by Garuda, the Indonesian national airline. In China, the company is accused of having paid bribes to bag contracts with Air China in 2005 and with China Eastern Airlines in 2010.

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  1. A
    Arun Singh
    Oct 8, 2014 at 9:00 am
    Being caught wrong-footed has turned precarious for London based Rolls-Royce, and has left the world’s second largest aircraft engine maker with an impending CBI probe and stalled current and pipeline dealings worth £700 million with Hindustan Aeronautics Limited (HAL) India. Believed to be repercussions of kickbacks channelled through the Singapore-based investment firm, Aashmore Private Ltd and owner Ashok Patni, the case has made headlines in the UK and India.Rolls Royce has affirmed having ties with Aashmore Private Ltd., and has set the record straight by admitting that they engaged the firm for the purpose of providing ‘strategic advice’ in energy dealings with HAL. Rolls Royce have also approached the Ministry of Defence, India, offering to return £1.8 million paid to Aashmore for providing ‘s and logistics support and local business expertise’. This has led to Rolls royce being pressed for a detailed investigation and further scrutiny of all doents pertaining to the controvertial deal.Rolls-Royce dealings in China and Indonesia are being probed by the Serious Fraud Office (SFO).The on-going SFO investigation relates to Rolls-Royce’s activities in China and Indonesia, not India, sources have confirmed. The issue went mainstream when Hindustan Aeronautics Limited (HAL) took stock of its supply chain and discovered a flouting of defence procurement norms by some of the suppliers and vendors. The investigation trail that followed, led to Rolls-Royce dealings with HAL between 2007 and 2011 being magnified further.