GAIL India slaps show-cause on Rolls-Royce

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State-owned gas utility GAIL India has slapped a show-cause notice on Rolls-Royce for allegedly not disclosing a commission of Rs 30 crore paid to agents in contracts worth Rs 1,639 crore.

Rolls-Royce has over the years supplied 63 out of the 72 gas turbines installed on nationwide pipeline network of GAIL. The British company also provides spares and services to the turbines.

Unlike the defence deals, PSU tendering allows for commission to be paid to agents but that has to be declared upfront during the bidding process.

Sources with direct knowledge of the development said Rolls-Royce allegedly paid a commission of 10-11.3 per cent in 24 spares and services deals to agent Aashmore, Singapore, without declaring the same at the time of bid submission.

In another contract for new engines, a fee of 2 per cent was paid to another firm Infinity in addition to the pre- declared commission of 2 per cent paid to its authorised spares and service agency Turbotech Energy Services in New Delhi.

When contacted, GAIL Chairman and Managing Director B C Tripathi confirmed sending show-cause notice to Rolls-Royce.

"GAIL has issued a show-cause notice to Rolls-Royce for not disclosing in the bids commission to be paid. Based on their response, further course of action will be taken," he said.

An email sent to Rolls-Royce for comments remained unanswered.

The show-cause by GAIL comes close on the heels of the Defence Ministry putting on hold all deals with Rolls-Royce until investigation into allegations of bribes being paid for supply of aircraft engines, is completed.

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