AAR Corp Settles Bribery Allegations

WASHINGTON (Reuters) – Global aerospace company AAR Corp (NYSE:AIR) has agreed to pay more than $55 million to resolve allegations of bribing Nepalese and South African public officials, the U.S. Securities and Exchange Commission (SEC) announced on Thursday.

The settlement amount addresses both SEC and U.S. Justice Department claims.

In addition, Deepak Sharma, a former executive of AAR's wholly owned subsidiary, has also settled related SEC charges by agreeing to pay $184,597 in disgorgement, which refers to the return of ill-gotten gains, according to the SEC.

AAR issued a statement confirming that U.S. authorities recognized the company's voluntary reporting of the misconduct, which was attributed to a former employee and a third party.

"We thank the DOJ and SEC for their collaboration and their recognition of the company's substantial cooperation," stated AAR CEO John Holmes.

Lawyers representing Sharma did not respond to requests for comment.

The SEC reports that between 2015 and 2018, Sharma allegedly executed a bribery scheme for AAR to secure a $210 million contract for two Airbus A330 jets with government-owned Nepal Airlines.

The SEC also alleges that Sharma was involved in another scheme aimed at obtaining an aviation services contract from a subsidiary of the government-owned South African Airways.

"The SEC's order finds that AAR paid millions of dollars in bribes to Nepalese and South African officials as part of the two schemes," the agency stated.

Representatives from Nepal Airlines and South African Airways did not respond to requests for comment.