Ex-Airbus India chief, summoned by ED, in UK

Former Airbus India chief Kiran Rao, who has been summoned by the Enforcement Directorate (ED), asking him to join the money laundering probe into alleged corruption in the 2005 deal for the supply of 43 aircraft to the erstwhile Indian Airlines, is currently in the United Kingdom.

The ED has issued three summons to Mr Rao for recording his statement.

Following a supreme court directive, the CBI had registered a case in May 2017 to look into the allegations of irregularities in the purchase of 111 aircraft worth about Rs 70,000 crore for Air India and Indian Airlines, which included the procurement of 43 aeroplanes from Airbus and the rest from Boeing.

Based on the CBI First Information Report (FIR), the ED launched the money laundering probe last year. The then officials of the Ministry of Civil Aviation are also under the scanner.

The agency is currently examining the price-fixation criteria of the aircraft, about which the Comptroller and Auditor General (CAG) had not come across any information while going through government records.

“To enable effective price negotiations, it is normal (and was also necessary) to make an assessment through commercial intelligence gathered globally to assess a reasonable or threshold price (based on comparable prices paid by other buyers and other factors). However, no benchmarks for the cost of the aircraft were set by AIL [Air India Limited]/ MoCA [Ministry of Civil Aviation] before negotiations were initiated with the manufacturers at various levels,” CAG had observed in its 2011 report.

Consequently, the CAG had said, in the absence of such benchmarks, it was difficult to determine the effectiveness and efficiency of negotiations and the price arrived at.