The Commission for Investigation of Abuse of Authority has summoned officials of five international firms that were involved in supplying two wide-body Airbus A330 jets to Nepal Airlines Corporation last year.

After the jet purchase deal ran into controversy, a corruption case was filed at the anti-graft agency.

In January, the parliamentary Public Accounts Committee had concluded that the procurement of the two wide-body aircraft by Nepal Airlines had caused a loss of Rs4.35 billion to the government. The $209.6-million Airbus deal was the largest ever in Nepal’s aviation history.

On Wednesday, the apex constitutional body for corruption control issued a public notice asking the firms—Hi Fly X Ireland Limited, Dublin; AAR International Inc, USA; German Aviation Capital GMBM, Frankfurt; Hi Fly-Transporte Aereos [Hi Fly Airlines], Lisbon, Portugal and Norton Rose Fulbright, Munich, Germany—to appear at the authority office in Tangal within 15 days.  

The notice has been issued in accordance with Clause 43 of the Corruption Prevention Act 2002 in relation to a complaint registered at the Commission for Investigation of Abuse of Authority about the purchase of A330-200 aircraft by Nepal Airlines Corporation, the anti-graft body said. “Failure to comply with this notice shall result in legal action as per prevailing laws,” it said in the notice.

The parliamentary committee had questioned the motive of Nepal Airlines Corporation and Hi Fly Portugal for forming a special purpose vehicle—Hi Fly X Ireland—to specifically look into the procurement process.

The committee has termed Hi Fly X a “fictitious” company and has suspected “massive financial irregularities” in the deal.

Stating that Ireland is the biggest tax haven in the world used by multinationals to shelter profits, the lawmakers suspected Nepal Airlines Corporation might have reached the deal with the company “to evade tax”.

While advance payment was released to the Portugal-based HiFly Transporte Aeroes, rest of the payment was released to the Ireland based-company, the committee report had said.  

The national flag carrier had initially signed a $209.6-million contract for two jets with the consortium of the United States-based AAR Corp and German Aviation Capital in April 2017. The corporation had deposited $79 million into the escrow account held by Norton Rose Fulbright as advance payment for the two jets.

Pointing out irregularities worth Rs4.35 billion in the aircraft purchase deal, the parliamentary committee had implicated then sitting tourism minister, Rabindra Adhikari, Nepal Airlines Corporation Managing Director Sugat Ratna Kansakar and some other government officials. Adhikari died in a helicopter crash on February 27.

The government also had formed its own panel in January to probe into the irregularities in the jet purchase deal, but its term ended before it could initiate any work.

A senior official at the anti-graft agency, who did not want to be named, told the Post that five international firms have been summoned as part of the investigation process.

The anti-corruption body is conducting inquiry with the Civil Aviation Authority of Nepal about the aircraft specifications. “In fact, aircraft purchase itself is a highly technical issue and the investigation has to be carried out from different angles. So the anti-graft body has also sought assistance from experts at the civil aviation regulator,” an official at the civil aviation body told the Post, seeking anonymity because he was not authorised to speak to the media.