Listed US aviation services business AAR Aircraft Sales & Leasing/AAR Corp has negotiated a USD55 million-plus settlement with the Department of Justice (DOJ) connected to activities in Nepal and South Africa in 2016-17 that potentially violated the US Foreign Corrupt Practices Act. A December 19 Securities and Exchange Commission (SEC) filing contained details of the settlement.

"AAR has entered a non-prosecution agreement with the DOJ, and the SEC has accepted the company’s offer of settlement and issued a cease-and-desist order," the filing reads. "The resolutions with both the DOJ and SEC make clear that the relevant conduct was principally carried out by a former employee of a company subsidiary and former third-party agents."

The total amount payable is USD55,599,653, inclusive of penalties, forfeiture, and pre-judgment interest. AAR says it expects to pay the amount using a combination of cash on hand and borrowings under its revolving credit facility.

ch-aviation recently reported that a former senior AAR manager had signed a plea deal with the DOJ admitting to violations of the Foreign Corrupt Practices Act connected to a corrupt deal to supply two A330-200s to Nepal Airlines Corporation.

The DOJ says that Deepak Sharma, acting as an agent for AAR, bribed Nepalese officials and others around 2016 to win the NPR24 billion rupee (USD177 million) purchase contract. Sharma has also agreed to testify at the trials of other individuals and entities who may also face charges.

Separately, Julian Aires, a third-party agent of AAR, has pleaded guilty for his role in the South Africa scheme. In this matter, AAR's third-party agent bribed South African officials to win an aircraft component support contract with South African Airways (SA, Johannesburg O.R. Tambo) subsidiary, South African Airways Technical. The deals netted AAR around USD24 million in profits.

AAR self-reported the matters to US authorities in 2019. “We are pleased to resolve these matters with the DOJ and SEC,” said AAR Chairman and CEO John M Holmes. Since reporting the matters, the company says it has taken extensive steps to enhance its global compliance programme. It says those efforts, along with the reporting and cooperation, were acknowledged by the DOJ and SEC.