Nepali officials were paid $2.5 million in bribes to seal the contract for the $209.6-million Airbus deal, the largest in Nepal’s aviation history, charging documents filed in the US court show.

Deepak Sharma, a former executive of the US-based aviation services provider AAR, pleaded guilty in July earlier this year to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) anti-bribery provisions.

The charges were based on allegations that Sharma was part of a conspiracy to bribe Nepali officials to secure two Airbus A330 deals in 2017.

Sharma pleaded guilty and agreed to forfeit around $130,000. His sentences are yet to be determined, so this case is ongoing.

Sharma, a Nepal-born British citizen, joined AAR in 2015. Before this, he was the chief technical officer at AJW Group, which he joined in 2008. He has also been the engineering director at UK International Airlines.

According to the documents in this case obtained by the Post, between November 2015 and August 2018, Sharma conspired with others to pay bribes to Nepali officials to win a bid to sell two Airbus A330-200 aircraft on behalf of AAR Corp to Nepal Airlines Corporation.

On June 24, 2024, the US Department of Justice alleged that Sharma—as an agent for AAR—conspired to bribe Nepali officials and filed a single count of information under seal in the District of Columbia, alleging a conspiracy to violate the FCPA’s anti-bribery provisions.

In July, guilty pleas were publicly revealed, five years after AAR disclosed possible FCPA violations.

The court unsealed the case on August 1, 2024, in connection with a plea agreement.

In December 2016, Nepal Airlines selected a group consisting of AAR Corp, German Aviation Capital, and Hi Fly (airline) of Portugal to purchase two widebody aircraft.

The month before, according to the investigation transcript, Sharma sent a text message to a conspirator, stating: “I am having dinner with the head of the evaluation committee now. We are discussing how to throw others out even if they come below our bid. See you tomorrow.”

In an Information filed, the US Department of Justice alleged that Sharma, on behalf of AAR, agreed to bribe Nepali officials to manipulate the deal in favour of AAR and a German aircraft leasing and trading company, working with a Nepali intermediary and an unnamed co-conspirator [a director of an affiliate of the German company] to facilitate a sham transaction between the German aircraft company and Nepal Airlines.

The Information describes Sharma’s email and text communications, as well as invoices and wire transfer records, which record payments made by the German company's Ireland-based Special Purpose Vehicle (SPV) to a United Arab Emirates-based bank account used by the Nepali intermediary to fund bribes to Nepali officials.

In Nepal, on April 4, the Commission for Investigation of Abuse of Authority (CIAA), the constitutional anti-graft body, completed its five-year probe into the Airbus deal, concluding that procuring two wide-body Airbus A330 jets caused a loss of Rs1.47 billion ($13.38 million) to the government.

The loss was computed based on the exchange rate at the time of the last instalment payment in 2018.

The CIAA filed a case against 32 individuals at the Special Court for their alleged corruption in the deal, commonly known as the ‘wide-body scam’. The court is expected to issue a verdict within this month.

The first of the two wide-body aircraft, Annapurna, arrived at the Tribhuvan International Airport in June 2018. The second, Makalu, came a month later.

In a statement, the commission said it had filed the case against a former minister, high-level sitting and retired government officials, private sector representatives, and aircraft suppliers.

The accused are former tourism minister Jeevan Bahadur Shahi, former managing director of Nepal Airlines Sugat Ratna Kansakar, former tourism secretary Shankar Adhikari and former finance secretary Shishir Kumar Dhungana.

At the time of the deal, Adhikari and Dhungana were on the board of the national flag carrier.

In charging documents filed in the US court, Sharma is described as an “agent” of Company 1 (a reference to AAR).

“It was the purpose of the conspiracy for Sharma and his co-conspirators to illegally benefit Company 1, Subsidiary 1 [a wholly-owned subsidiary of Company 1], and others by bribing Nepali officials, including Foreign Official 1 [a Nepali citizen who served as a high-level official at Nepal Airlines Corporation from at least approximately 2015 through 2019] in order to win a bid to sell two Airbus A330-200 aircraft to the state-owned national carrier.”

Sharma and his co-conspirators made and received wire transfers intended, in part, as bribes for Nepali officials in connection with Nepal Airlines Corporation transactions, using bank accounts in the United States, Ireland, and the United Arab Emirates, among other places.

Sharma and his co-conspirators attempted to disguise the wire transfers as legitimate business transactions by entering into sham agreements between Subsidiary 2 [a wholly-owned subsidiary of Company 1], Company 2 [an aircraft leasing and trading company based in Germany], and Company 3 [a special purpose vehicle incorporated in Ireland and managed by Company 2] on the one hand, and Companies 4 [a Hong Kong incorporated company used by Intermediary] and 5 [a United Arab Emirates incorporated company used by Intermediary] on the other.

Some payments were made under sham invoices sent by Sharma and his co-conspirators from Companies 4 and 5 and directed to Company 3. The invoices falsely referred to the bribe payments as “advances”.

“In total, between in or around May and August 2018, Company 3 paid Company 5 the equivalent of approximately $2,500,000 in connection with Nepal Airlines transaction, a portion of which Sharma understood would be distributed as bribes to Nepali officials, including Foreign Official 1.”

On or about March 29, 2016, approximately six months before Nepal Airlines publicly issued a Request for Proposal (RFP) for the purchase of two A330s, Sharma forwarded an email to two executives at Company 1 containing a draft RFP that was circulated among Nepal Airlines Corporation officials, including Foreign Official 1.

In his email to the two executives at Company 1, Sharma stated, “Please find attached Draft RFP[.] NOTE: [T]his [is] not published yet, and it is strictly for three of us [a Company 1 executive], you and I, to comment and change any terms to suit [Company 1]. Let me know if you want any changes made to the payment terms or bid terms so that it favours [Company 1]. I can ask these to be incorporated [sic] into the RFP for publication. I am meeting with the [Foreign Official 1] and Chairman this week…”

On or about September 1, 2016, approximately one month before Nepal Airlines Corporation publicly issued the RFP, Foreign Official 1 sent an email to Sharma, writing, “What I have in mind is that we will specify MOU signing date, purchase agreement date and delivery date in such a way that [a competitor of Company 1] cannot meet delivery dates.

“Following are tentative dates, and I want your feedback on whether you can meet delivery dates… Tentative dates I fixed but not yet shared with other Nepal Airlines executives…”

On October 30, 2016, Foreign Official 1 texted Sharma, “[N]o need to worry at all. Almost all higher-ups are in our pocket.”

On May 15, 2018, Sharma sent Individual 1 a text message about Intermediary and Foreign Official 1 pressuring to pay Company 5’s invoice, writing, “The Nepali guys is [sic] chasing like hell.”

On May 17, 2018, Sharma sent an email to Individual 1 with an attached invoice from Company 5 to Company 3 for $450,000 for “Service Provided for Bid and Sale of X2A330 as an Advance.”

On July 3, 2018, Individual 1 and others caused a wire transfer of approximately 390,000 EURO (the equivalent of roughly $450,000) from Company 3’s bank account in Ireland to Company 5’s bank account in the United Arab Emirates, in part for the benefit of Nepali officials, including Foreign Official 1

On August 9, 2018, the Intermediary emailed Sharma, attaching two invoices from Company 5 to Company 3 for $1,000,000 each for “Service Provided for Bid and sale of X2 A330 as an Advance.”

On August 10, 2018, Individual 1 and others caused two wire transfers of approximately $1,000,000 each from Company 3’s bank account in Ireland to Company 5’s bank account in the United Arab Emirates, partly for the benefit of Nepali officials, including Foreign Official 1.