Global aerospace company AAR Corp has agreed to pay over $55 million to resolve charges of bribery involving government officials in Nepal and South Africa, reported Reuters, citing the US Justice Department and the Securities and Exchange Commission (SEC).
The settlement follows allegations of violations of the Foreign Corrupt Practices Act (FCPA), which prohibits corrupt payments to foreign officials.
Between 2015 and 2020, AAR admitted to conspiring to pay bribes to secure contracts with state-owned airlines in the two countries, earning nearly $24 million in profits. In Nepal, the company secured a deal with Nepal Airlines Corporation (NAC), the national flag carrier, for the sale of two Airbus A330-200 aircrafts by bribing officials through intermediary companies.
Deepak Sharma , a British citizen of Nepali origin and former executive of an AAR subsidiary, pleaded guilty earlier this year for his role in facilitating the bribery scheme. Sharma acted as an intermediary in the procurement process for the aircraft purchased by Nepal Airlines for Rs 24 billion. According to the FCPA report, he facilitated the transfer of approximately $2.5 million in bribes to Nepali and foreign officials through multiple accounts across different countries.
This development comes two weeks after Nepal’s Special Court convicted senior Nepali officials and seven foreign nationals involved in the aircraft purchase for corruption. A bench comprising Chair Tek Narayan Kunwar and members Tej Narayan Singh Rai and Ritendra Thapa ruled on December 5 that irregularities amounting to Rs 1.47 billion occurred in the procurement process.
After a five-year investigation, the Commission for the Investigation of Abuse of Authority (CIAA), Nepal’s constitutional anti-graft body, filed the case in April 2024 against 32 individuals, alleging corruption.
The court found Shankar Prasad Adhikari, then Tourism Secretary and NAC Board Chair; Sugat Ratna Kansakar, NAC General Manager; Shishir Kumar Dhungana, NAC Board Member and former Secretary; and Buddhi Sagar Lamichhane, Joint Secretary at the Ministry of Tourism guilty.
Former Tourism Minister Jeevan Bahadur Shahi, however, was acquitted.
Besides Sharma, the convicted officials received prison sentences and fines. Kansakar was sentenced to two years and nine months in prison, reduced by 50 percent due to his senior citizen status. Adhikari received a one-year and nine-month sentence, while Dhungana and Lamichhane were each sentenced to one-and-a-half years. Each convict was also ordered to forfeit Rs 122.59 million.
Each of the seven foreign nationals, including Sharma, was sentenced to one-and-a-half years in prison and ordered to forfeit Rs 122.59 million.
The convicted include Christian Nuehlen, former Director of Hi Fly X Ireland Limited; Oleg Calistru, former Finance Director of German Aviation Capital; John M. Holmes, President and CEO of AAR International; Ana Topa, Managing Director of German Aviation Capital; Paulo Mirpuri, President of Hi Fly Airlines Portugal; and Gerald Thornton, Director of Hi Fly X Ireland Limited.
AAR Corp has entered into an 18-month non-prosecution agreement with the US Justice Department, avoiding criminal charges in exchange for compliance and full cooperation with authorities.
