By Krishn Kaushik
NEW DELHI (Reuters) -India has filed a graft case against Britain's BAE Systems (OTC:BAESF) plc and Rolls-Royce (OTC:RYCEY) Holdings for "criminal conspiracy" in the procurement and licensed manufacturing of 123 advanced jet trainers, a federal police document showed.
The case is based on the findings of an investigation launched by India's Central Bureau of Investigation (CBI) in 2016, the document dated May 23 said.
Rolls-Royce said the allegations being investigated were disclosed back in 2017, when it paid a 497 million pound fine to Britain's Serious Fraud Office (SFO) to settle a case involving transactions with countries including China, India and Thailand.
A spokesperson for the company said it was continuing to assist Indian authorities in their investigation, and that it was now "a fundamentally different business".
"We will not tolerate business misconduct of any sort and are committed to maintaining high ethical standards," the spokesperson said.
In its response BAE said it would be inappropriate to comment on an ongoing probe. India's defence ministry did not respond to a request for comment.
The document seen by Reuters alleged the manufacturers of the trainer jet paid commissions in violation of Indian defence contract rules to middlemen who helped them get the contracts by exerting "undue influence" on Indian government officials.
It also said that Rolls-Royce India and its officials entered into a criminal conspiracy with unknown officials of India’s defence ministry and two middlemen between 2003 and 2012 for contracts linked to the trainer jets.
India in 2005 signed a deal to buy 24 Hawk 115 advanced jet trainers for 734.21 million pounds ($926.65 million), and licensed manufacturing of 42 jets for 308.25 million pounds, along with the supply of materials and transfer of technology.
This was done, the CBI said in its document, "in lieu of huge bribes, commissions and kickbacks paid by the said manufacturer and its officers to intermediaries".
Between 2008 and 2010, it said the Indian government approved the licensed manufacturing of an additional 57 jets for 95 billion rupees ($1.16 billion) under a separate agreement with BAE Systems (Operations) Ltd.
The filing of the document is the first step towards a formal trial.
($1 = 0.7923 pounds)
($1 = 81.7800 Indian rupees)