Pilatus accused of paying millions to secure Indian defence contract

Two of the 75 PC-7 MKII planes destined for the Indian Air Force. (c) Pilatus Aircraft Ltd

The Swiss aircraft manufacturer has been accused by an Indian investigating agency of paying over CHF50 million ($51 million) in kickbacks for securing a contract to supply 75 training planes to the Indian air force.

On June 19, Pilatus was named in a case filed by India’s Central Bureau of Investigation (CBI) for “entering into a criminal conspiracy” with a defence consultancy to help swing a contract in its favour. In 2012, the company won a bid to supply 75 PC-7 training aircraft to the Indian air force in a deal worth almost half a billion Swiss francs.

The CBI’s first information report claims that in 2010 Pilatus transferred CHF1 million to an Indian bank account linked to the consultancy called Offset India Solutions Private Limited that was run by notorious arms dealer Sanjay Bhandari. In addition, the Swiss firm made huge deposits totalling CHF49,887,900 to the Dubai branch of the consultancy between 2011 and 2015.

“It is suspected that the said commission amount was paid in order to influence the public servants of the IAF [Indian Air Force] and MoD [Ministry of Defence] of the government of India associated with the process of the aforesaid procurement,” said the case report.

Pilatus has denied being approached by the CBI over kickbacks.

“Pilatus has not been contacted by India’s Central Bureau of Investigation (CBI),” a company spokesperson told swissinfo.ch on Wednesday.

The company representative also said that the alleged kickbacks have been a subject of repeated discussion in the Indian media for several years. The company consequently refused to comment on the matter.

In 2017, the Indian government requested Switzerland share information on Swiss bank accounts linked to the middleman Bhandari who fled the country in 2016 and is currently a fugitive from the law.