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Kathmandu,Nepal: AAR Corp, a US-based aviation services company, has been fined over $55 million for violating the U.S. Foreign Corrupt Practices Act (FCPA) by bribing government officials in Nepal to secure a lucrative aircraft deal. The settlement with the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) addresses allegations of corruption linked to the sale of two Airbus A330-200 aircraft to Nepal Airlines Corporation (NAC).
The Illinois-based company admitted to conspiring to pay bribes between 2015 and 2020, resulting in nearly $24 million in illicit profits. AAR's former executive, Deepak Sharma, played a central role in the bribery scheme, which involved manipulating the bidding process and influencing officials to favor AAR's proposal. Sharma, who served as President of International Supply Chain at AAR, has pleaded guilty to conspiracy charges related to the anti-bribery provisions of the FCPA.
The contract for the two aircraft, valued at $209.6 million, marked the largest aircraft purchase in Nepal's history. AAR engaged third-party agents to facilitate the payments, which were disguised as commissions and consulting fees. Despite red flags, the company proceeded with these agents, leading to significant financial penalties.
In response to the scandal, US authorities emphasized their commitment to holding companies accountable for international corruption. The DOJ noted that proactive reporting and cooperation during investigations can lead to reduced penalties for companies involved in misconduct.
This case not only highlights governance failures within Nepal's aviation sector but also raises concerns about corruption in international business dealings. The repercussions of this scandal may prompt further scrutiny and calls for reforms within both Nepal's regulatory framework and the global aviation industry.
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