India terminates business dealings with Swiss firm Pilatus Aircraft

NEW DELHI — The Indian government has terminated business dealings with Swiss company Pilatus Aircraft Ltd. for one year following allegations of monetary kickbacks in 2012 in relation to an Indian Air Force contract for 75 basic trainers.

A July 12 statement by the Ministry of Defence said that “business dealings with Pilatus with remain suspended for one year or until further orders for violation of the integrity pact.”

It also said the investigation by Indian agencies discovered that the Swiss firm engaged in corrupt practices to win the PC-12 Mark II basic trainer aircraft contract.

Last month, India’s national investigation agency, the Central Bureau of Investigation, lodged a legal case against Pilatus Aircraft, arms dealer Sanjay Bhandari, and unknown officials with the Air Force and MoD. CBI alleged irregularities in the contract for the basic trainers.

Pilatus was awarded the $437.5 million contract in 2012, and all the deliveries were made in two years.

The India government said it had received reports of engagement of agents by Pilatus for assistance in the sale of the basic trainer for the Air Force and alleged the payment of a commission was offered.

India does not permit defense companies to engage defense agents to carry out defense business activities for the purpose of securing contracts.

In January 2017, the Swiss company informed the MoD that it had engaged one domestic company, Offset India Solutions, for the purpose of facilitating offsets plan and government relations for the basic trainer program.

Pilatus reportedly made a payment of 1 million Swiss franc (U.S. $1.01 million) to Offset India Solutions in 2010 to facilitate this deal.

Pilatus was asked by the MoD to explain payments it allegedly made to Offset India Solutions, but the Swiss company did not furnish a satisfactory reply, according to the Indian government.

Incidentally, Bhandari promotes Offset India Solutions and the local firm has also been barred from carryin gout defense activity with the MoD and the Indian military.

The MoD would not comment on whether Pilatus will be blacklisted or further penalized.

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