GAIL India slaps show-cause on Rolls-Royce

Tags: News
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.

EDITORIAL OF THE DAY

  • Because our politicians elbowed out our teachers on Teachers’ Day

    The Swachch Bharat campaign made the highest leaders sweep. Teachers’ Day is making them teach.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Sachin Shridhar

Crouching tiger, hidden dragon

The Chinese are consummate gamblers. If you visit a casino ...

Zehra Naqvi

Capturing change

The pace of change in the world around us can ...

Gautam Gupta

Bring on the Benares brigade

It was in 2003 when I first started work and ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture