Rolls-Royce Holdings PLC (LSE:RR.) and BAE Systems PLC (LSE:BA.) have been struck with allegations of corruption by Indian investigators over previous fighter jet deals.
Commissions were allegedly paid by the manufacturers to Indian defence ministry officials and two middlemen who exerted “undue influence” on the government to sign deals for Hawk training jets.
Rolls-Royce commented the claims, which focus on deals made between 2003 and 2012, had already been disclosed in 2017, when the FTSE 100-listed firm paid £497mln to Britain's Serious Fraud Office.
"We will not tolerate business misconduct of any sort and are committed to maintaining high ethical standards," Rolls-Royce said, adding the company was now “fundamentally different”.
India’s Central Bureau of Investigation argued deals worth £1.04bn to buy 24 Hawks and for licensed manufacturing of 42 more were made “in lieu of huge bribes [and] commissions”.
Deals worth almost £1bn were later signed by the Indian government between 2008 and 2010 for the licenced manufacturing of a further 57 jets, which are designed by BAE and powered by Rolls-Royce engines.
BAE said it was “committed to maintaining high standards of ethical conduct,” but added it would be “inappropriate” to discuss the ongoing investigation.
Both companies have previously hinted to the importance of developing ties with India, with Rolls-Royce reportedly willing to develop an entirely new jet for the country.
Having filed the document on May 23, Indian investigators have marked the first step in proceeding to a formal trial.
Rolls-Royce shares fell 1% following the news, while BAE remained broadly flat.