India has put on hold all existing and new deals with U.K.-based Rolls-Royce pending completion of an investigation into allegations of bribery.
Rolls-Royce said it would “cooperate fully” with Indian authorities.
The BBC said Tuesday India’s defense ministry had suspended all “existing and future” contracts with Rolls-Royce pending the results of an investigation by the country’s Central Bureau of Investigation into the purchase of jet fighter engines in a deal worth $1.6 billion (£960 million), the Press Trust of India (PTI) reported.
Rolls Royce is the second biggest manufacturer of aircraft engines in the world.
The company supplied engines to state-run Hindustan Aeronautics Limited (HAL) between 2007 and 2011, the BBC said.
The Hindu (India) said “HAL has also been asked to take action to recover from the London-based Rolls Royce the money paid by it to its commission agents, highly-placed Defense Ministry officials told PTI in New Delhi.”
The U.K. Serious Fraud Office said in December that it was “accelerating” a criminal investigation into allegations of bribery and corruption at Rolls Royce.
Rolls Royce said in late 2012 the SFO had asked it to investigate allegations of misconduct involving intermediaries in Indonesia and China.
Last month, two people were arrested in London as part of the SFO’s investigation.
In January, India terminated a £466 million helicopter order with British-Italian company AgustaWestland International because of allegations the firm bribed Indian government officials.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.