New Delhi, October 30, 2018: Airbus executive vice-president Kiran Rao and six others accused of money laundering in a 13-year-old Rs 8,000-crore deal to supply 43 passenger planes to the erstwhile Indian Airlines have been slapped with legal notices. A person in the know told The Economic Times that on October 16 the Enforcement Directorate issued notices to the above people under the Prevention of Money Laundering Act (PMLA). “We understand that some of the accused are currently not present in India, but they will be required to come to New Delhi in the next one month,” the source added.
The Central Bureau of Investigation (CBI) had started probing the deal in 2010 as it came to light that clauses governing the setting up of an MRO (maintenance, repair and overhaul) unit, training centre and a warehouse by Airbus were allegedly diluted by some officials to favour the French aviation firm. The deal had been finalised in September 2005, under the UPA-I regime, when an Empowered Group of Ministers had given its nod after Airbus agreed to set-up the facilities along with the supply of 43 A320 family aircraft to Indian Airlines, which merged with Air India in 2007 according to the reports published in businesstoday.in.
Then, in 2013, the investigative agency had registered a case for alleged irregularities in the deal and had subsequently booked Airbus Industries and seven officials, who had held senior positions in the Indian Airlines. Officials including deputy managing director, director (planning), director (finance), functional director (engineering), general manager (engineering) and two deputy general managers had reportedly been made accused in the case. Airbus had then denied charges of any irregularity.
A year later, CBI personnel had even flown to London to question Rao, former president of Airbus India, about the deal but had not made any allegations of kickbacks or money laundering against him.
The buzz is that the lawyers and legal advisors of some of the accused have had interrogations scheduled with the ED. Citing experts the daily added that the money laundering allegations could spell trouble for both Airbus and Rao. The ED may even look at attaching the Bangalore-born Rao’s properties in India, but it’s still unclear whether any such action has been initiated.
Businesstoday.in further added that reuters last year reported that Rao had initially been identified as a replacement for long-serving Airbus sales chief John Leahy ahead of his retirement, but the position eventually went to Rolls-Royce’s Eric Schulz, who held onto the position for less than a year before he was replaced last month.
Incidentally, the Indian Airlines-Airbus deal is not the only one under the ED’s scanner. The agency has recently registered multiple criminal cases to probe allegations of irregularities and money laundering in at least four deals signed during the UPA rule, including the controversial merger of Air India and Indian Airlines. The allegations relate to purchase/leasing of 111 aircraft in total from Boeing and Airbus, costing about Rs 70,000 crore, for the two state-run carriers (before their merger). Two of the cases two cases relate to surrender of profitable routes and timings of Air India to favour national and international private players, which allegedly caused a “huge” loss to the Maharajah.