Embraer has admitted entering into agreement with an "Agency" in DRDO contract: Government

Embraer deal was to purchase three modified aircraft for installation of DRDO developed mission system to develop AEW&C system.

Kickbacks were allegedly paid in 2009 through subsidiaries of Embraer via a Singapore based company which is owned by the middleman. | File Photo

NEW DELHI: The government today said that Brazilian firm Embraer has admitted to it that they have entered into an agreement with an "Agency" towards a controversial DRDO contract and that a sum of USD 5.76 million was paid to the agency.

Embraer deal was to purchase three modified aircraft for installation of DRDO developed mission system to develop indigenous Airborne Early Warning & Control (AEW&C) System.

There were media reports on alleged involvement of agents in the deal.

"Therefore, DRDO asked for clarification from Embraer based on the media reports. Embraer, in their reply, admitted that they have entered into an Agreement with an Agency towards the Contract and that a sum of USD 5.76 million was paid to the Agency. The same has been submitted to CBI for investigation," Minister of State for Defence Subhash Bhamre said in a written reply to Rajya Sabha.

CBI has registered a case against NRI arms dealer Vipin Khanna and two companies based abroad in a case of alleged kickbacks in connection with the deal with Embraer signed in 2008.

Khanna, whose name had figured earlier also in defence deals probed by the agency, has been booked along with two companies--Brazil-based Embraer and Singapore-based Interdev Pte Ltd--in connection with the deals totalling USD 208 million.