Monday, April 19, 2021

Rolls-Royce In Corruption Case? CBI Accuses Rolls-Royce Of Bribery Worth Rs 77 Crore


Rolls-Royce plc has been booked in a bribery or corruption case by the CBI in India.

The CBI has alleged that Rolls-Royce has paid nearly Rs 77 crore in bribes to an agent to get contracts with HAL, GAIL and ONGC.

It has to be clarified that the case does not involve Rolls-Royce Motor Cars in any way, but has been filed against Rolls-Royce plc which is the aircraft engine and defence manufacturer.

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Rolls-Royce is mostly known for its ultra-luxurious cars that overflow with opulence.

However, a fact that a majority of the people in India do not know is that Rolls-Royce is the second-largest manufacturer of aircraft engines.

It is also into the production of defence equipment, marine propulsion systems and has its presence in the energy sector too.

This particular case appears to be in the aviation and energy sectors as it involves HAL, Gail and ONGC. HAL (Hindustan Aeronautics Limited), GAIL (Gas Authority of India Limited) and ONGC (Oil & Natural Gas Corporation) are public sector undertakings and each of them has their own set of rules and guidelines when it comes to contracts.

HAL does not allow the involvement of an agent while GAIL and ONGC do allow an agent under the condition that the agent must be named.

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Read MoreUK drops corruption charges against Rolls-Royce in India, other countries

However, bribery is strictly not allowed as it is illegal in a public sector undertaking.

Rolls-RoyceThis is exactly where Rolls-Royce has allegedly made its mistakes. According to a report by ETAuto, Rolls-Royce appointed a singapore-based man named Ashok Patni and his companies as agents to win parts supply contracts.

The report states that HAL and Rolls-Royce did business worth Rs 4,700 crore. The business was related to the supply of parts for Avon and Allison engines.

Avon and engines were produced by Rolls-Royce and the Allison company was bought by Rolls-Royce in 1995.

The jet engines are currently being used by GAIL and ONGC as stationary power sources for multiple purposes.

Rolls-Royce wanted to supply the spare parts to keep these engines running and it is for this very purpose that Rolls-Royce paid bribes to get the contract. The company got the contract and successfully fulfilled it too.

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However, it is now in trouble after a five-year-long investigation conducted by the CBI.

The investigation started after the Ministry of Defence(MoD) received a letter alleging Rolls-Royce’s corruption.

The MoD then forwarded the letter to the CBI which then investigated the case.

The CBI has now booked Rolls-Royce plc, Rolls-Royce India Pvt Ltd, Ashok Patni, his companies, and a few officials from HAL, ONGC and GAIL.

Read MoreRolls-Royce bribery claims narrowed, say reports

Thoughts On CBI Filing Corruption Case Against Rolls-Royce For Bribes Of Rs 77 Crore The aviation industry, defence and energy sectors are worth billions of dollars.

Transactions involving lots of money and risk are on the table. It remains to be seen how this case turns out for Rolls-Royce plc.

Roll-Royce is a brand that has earned its reputation by producing some of the best cars, power solutions and aircraft engines for over a century.

It would not risk losing its reputation over a couple of spare parts deals.

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