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Blacklisting Rolls Royce will hit Jaguar fleet, AG told govt

The case before the CBI is that a commission ranging from 10 per cent to 11.3 per cent was received by Aashmore Pvt Ltd and Patni for the HAL contract.

Written by Maneesh Chhibber , Ritu Sarin | New Delhi |
October 10, 2014 3:08:31 am

The NDA government decided not to blacklist Rolls Royce despite an ongoing probe against the global engine manufacturer because it wanted to ensure the availability of spares and ancillaries for its Jaguar fighter fleet, it has emerged.

A blanket ban on Rolls Royce became a possibility after the company admitted to hiring an agent for a maintenance contract with Hindustan Aeronautics Limited (HAL) for its Hawk Advanced Jet Trainers. However, the government chose not to impose any such ban keeping in mind the Rs 778.45 crore contract it had signed with the company for the repair and overhaul of the Jaguar fleet.

According to Attorney General Mukul Rohatgi, whose opinion on the subject was accessed by The Indian Express, the government should take a “pragmatic’’ view on the issue because “defence preparedness depends a lot on foreign manufacturers, suppliers of parts and the like”. And so, he added, “a strait jacket formula for all blacklisting type of cases (should not be followed)”.

The Defence Ministry has informed him, the AG stated, that procurement of material and spares for the Jaguar fleet has also been kept in abeyance as a result of the probe and that “non-ordering of these items would render servicing of Jaguar aircraft in jeopardy”.

The opinion of the Attorney General, dated July 10, signals a clear departure from the line adopted by the previous Defence Ministry, under A K Antony, which had blacklisted several foreign manufacturers and defence manufacturers at the slightest allegation of a scam.

The Rolls Royce deal with HAL had hit the headlines after the company informed Indian officials last December that it had appointed an agent (commercial advisor) for the 2007-2011 maintenance contract for the jet trainers. The CBI was subsequently asked to probe the issue.

CBI officials told The Indian Express that following the registration of a PE (Preliminary Enquiry), they have confirmed that money transfers did take place between the agent, Ashok Patni, his company Aashmore Pvt Ltd, and Rolls Royce. The officials added that they had also contacted Patni in Singapore and that he would be “joining investigations” at the CBI headquarters later this month.

The case before the CBI is that a commission ranging from 10 per cent to 11.3 per cent was received by Aashmore Pvt Ltd and Patni for the HAL contract. The Attorney General noted that HAL was trying to recover the commission but opined that despite the PE being in progress, defence preparedness was of critical importance. “Merely because a PE is pending to investigate the matter by CBI, there is no reason to totally blacklist Rolls Royce and not to deal with them at all,” he stated.

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