Enforcement Directorate (ED) officials Thursday said their investigation into alleged money laundering in connection with the merger of Air India and Indian Airlines and acquisition of 111 aircraft by the two carriers during the UPA regime had made headway with the detection of a money trail.
“Our investigation into the acquisition of aircraft is at an advanced stage. We have been able to establish financial trails of money flowing into certain NGOs. These NGOs were floated by middlemen and the money came from aircraft manufacturers supplying to the Indian carriers,” a senior ED official said.
The ED revelations came on the day French newspaper Le Monde reported that Airbus, one of the aircraft manufacturers that supplied to the Indian carriers, could face fines of several billion dollars in the wake of a US Department of Justice probe into “improper practices”. According to Le Monde, the probe had found several corruption allegations in multiple countries, mostly in Asia, including India and Malaysia.
Newswire service AFP, reporting from Paris, said Airbus had put out a statement saying it was cooperating with US authorities.
Le Monde said Airbus allegedly used CSR activities and the setting up of aircraft maintenance, repair and overhaul to channel funds to middlemen. It also mentioned the case of Deepak Talwar, a corporate lobbyist, who is under probe by CBI and ED for allegedly misusing funds received through CSR from Airbus in violation of the Foreign Contribution Regulation Act (FCRA).
In September 2016, The Indian Express first reported that funds donated by Airbus and MBDA, Europe’s leading missile manufacturing company, to Talwar’s NGO Advantage India had come under the scanner of the Income Tax department. The payments were made to Advantage India between June 2012 and April 2015 in several tranches by MBDA and the erstwhile EADS which in 2014 was reorganised as the Airbus Group.
In November, 2017, CBI registered a case of cheating, forgery and criminal conspiracy against Talwar for allegedly diverting foreign funds received by his NGO for personal use. It said Advantage India received funds to the tune of Rs 90.72 crore from Airbus and MBDA. The funds had been received as part of corporate social responsibility (CSR) of the two donors and were meant for activities in the field of education.
Talwar was unavailable for comment Friday. But he had earlier told The Indian Express that there had been no wrongdoing, that he had set up the NGO 17 years ago and was no longer involved in its day-to-day functioning.
The ED has registered four cases of alleged money laundering in the matter. Sources in ED said the cases were based on four CBI FIRs lodged last year and have been registered under provisions of the Prevention of Money Laundering Act. NCP leader Praful Patel was Civil Aviation Minister when the Air India-Indian Airlines merger took place during the UPA-I rule. In media interactions earlier, Patel had denied any wrongdoing and said all decisions had been collective.
“While probing a case of money laundering against corporate consultant Deepak Talwar, we stumbled upon some money trail that is linked to the entire matter of Air India. We have traced a payment linked to the Air India case to an entity linked to Deepak Talwar. The money involved is huge,” a senior ED official said.
The four ED cases are related to the Air India-Indian Airlines merger, purchase of 111 aircraft from Boeing and Airbus at Rs 70,000 crore, alleged deliberate ceding of profitable routes and schedules to private airlines, and opening of certain training institutes with foreign investment.
In a report tabled in Parliament in January 2012, the Comptroller and Auditor General (CAG), while flagging irregularities, had called the decision to acquire 111 aircraft by Air India “a recipe for disaster”, which should have raised alarm in the government. It said that the aircraft acquisition through debt had “contributed predominantly” to the airline’s massive debt liability.