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| Lib Dems mired in row after party donor blacklisted by fraud squad | Lib Dems mired in row after party donor blacklisted by fraud squad |
| (2 months later) | |
| The Liberal Democrats were mired in a fresh donor row when it emerged that one of the party's biggest benefactors is an international arms dealer listed on the Indian fraud squad's blacklist of "undesirables". | The Liberal Democrats were mired in a fresh donor row when it emerged that one of the party's biggest benefactors is an international arms dealer listed on the Indian fraud squad's blacklist of "undesirables". |
| Sudhir Choudhrie, who has donated more than £500,000 to the Lib Dems via his family company since 2010, was named by India's Central Bureau of Investigation as one of 23 "unscrupulous persons" in 2012, the Guardian can reveal. | Sudhir Choudhrie, who has donated more than £500,000 to the Lib Dems via his family company since 2010, was named by India's Central Bureau of Investigation as one of 23 "unscrupulous persons" in 2012, the Guardian can reveal. |
| However, the Lib Dems accepted donations from Choudhrie as recently as November 2013, when his C&C Alpha Group family company donated £30,000 [see footnote]. His family and companies have donated more than £500,000 since 2010. | |
| Choudhrie's activities were thrown into the spotlight this week when he and his son Bhanu were arrested and questioned for several hours by the Serious Fraud Office in connection with an investigation into allegations of multimillion pound bribery and corruption at Rolls-Royce, which supplies engines for military and civilian jets. Sudhir Choudhrie has always denied claims that he is an arms dealer. | Choudhrie's activities were thrown into the spotlight this week when he and his son Bhanu were arrested and questioned for several hours by the Serious Fraud Office in connection with an investigation into allegations of multimillion pound bribery and corruption at Rolls-Royce, which supplies engines for military and civilian jets. Sudhir Choudhrie has always denied claims that he is an arms dealer. |
| The revelations about the Indian businessman come as a growing network of links between the Choudhrie family and the Lib Dems emerged. | The revelations about the Indian businessman come as a growing network of links between the Choudhrie family and the Lib Dems emerged. |
| • Nick Clegg and his wife Miriam hosted an event in 2011 for Choudhrie's charity, Path To Success, in Lancaster House, London, an official government residence. | • Nick Clegg and his wife Miriam hosted an event in 2011 for Choudhrie's charity, Path To Success, in Lancaster House, London, an official government residence. |
| • Justice minister Simon Hughes received a £60,000 donation in November 2013 after a request for the cash. | • Justice minister Simon Hughes received a £60,000 donation in November 2013 after a request for the cash. |
| • Bhanu's wife, Simrin Choudhrie, says on her LinkedIn page that she worked as a campaign assistant in Hughes's office on his 2004 mayoral campaign and "later assisted Simon with the bid to host the Olympics in 2012". | • Bhanu's wife, Simrin Choudhrie, says on her LinkedIn page that she worked as a campaign assistant in Hughes's office on his 2004 mayoral campaign and "later assisted Simon with the bid to host the Olympics in 2012". |
| • Danny Alexander, chief secretary to the Treasury, visited Choudhrie's home last year during an official government trip to India. | • Danny Alexander, chief secretary to the Treasury, visited Choudhrie's home last year during an official government trip to India. |
| Lib Dem sources said the party had no knowledge that Choudhrie was on the CBI list of people "suspected to be resorting to corrupt or irregular practices in their dealings with official agencies". | Lib Dem sources said the party had no knowledge that Choudhrie was on the CBI list of people "suspected to be resorting to corrupt or irregular practices in their dealings with official agencies". |
| The sources said the party had done full due diligence on the Choudhries along with other donors before the last election in 2010. At this point, they were given documentation – a chit – showing that Sudhir Choudhrie had been cleared of all allegations against him in India. The sources said the party only found out about Choudhrie and his son's arrest on Wednesday from newspaper reports. | The sources said the party had done full due diligence on the Choudhries along with other donors before the last election in 2010. At this point, they were given documentation – a chit – showing that Sudhir Choudhrie had been cleared of all allegations against him in India. The sources said the party only found out about Choudhrie and his son's arrest on Wednesday from newspaper reports. |
| It is understood Clegg has met Choudhrie many times as he has been a major donor for a decade, but they could not be described as personal friends. | It is understood Clegg has met Choudhrie many times as he has been a major donor for a decade, but they could not be described as personal friends. |
| "The Choudhrie family are long-term party supporters and donors. Sudhir Choudhrie has met Nick Clegg and other senior party figures on a number of occasions," one aide said. | "The Choudhrie family are long-term party supporters and donors. Sudhir Choudhrie has met Nick Clegg and other senior party figures on a number of occasions," one aide said. |
| The Indian-born businessman, who lives in a £5m apartment in Chelsea, was placed on the Indian list of "unscrupulous persons" following two formal investigations of alleged bribery in Choudhrie's work brokering arms deals. | The Indian-born businessman, who lives in a £5m apartment in Chelsea, was placed on the Indian list of "unscrupulous persons" following two formal investigations of alleged bribery in Choudhrie's work brokering arms deals. |
| Choudhrie was investigated and later cleared of allegations he accepted a $150,000 (£90,000) commission as part of an arms deal with the Israeli company Soltam in 2000. | Choudhrie was investigated and later cleared of allegations he accepted a $150,000 (£90,000) commission as part of an arms deal with the Israeli company Soltam in 2000. |
| The Indian CBI also investigated claims that Choudhrie and his companies received "a number of suspected remittances to the tune of millions of dollars" from arms firm Israel Aircraft Industries over a deal to supply seven Barak missile systems and 200 missiles to the Indian navy [see footnote]. The CBI closed its seven-year investigation into the allegations on 24 December 2013 due to a lack of evidence. | |
| The "Undesirable Contactmen" list, which was prepared by the CBI and distributed to all Indian government departments, states politicians and officials should be "careful and cautious in dealings with unscrupulous contact men whose names are on these lists, to avoid associating with them socially and accepting hospitality and gifts from them. | The "Undesirable Contactmen" list, which was prepared by the CBI and distributed to all Indian government departments, states politicians and officials should be "careful and cautious in dealings with unscrupulous contact men whose names are on these lists, to avoid associating with them socially and accepting hospitality and gifts from them. |
| "Even official dealings with the UCM should be discouraged. Nefarious activities of these individuals should not be allowed and they should not be allowed sponsorship of Govt projects." | "Even official dealings with the UCM should be discouraged. Nefarious activities of these individuals should not be allowed and they should not be allowed sponsorship of Govt projects." |
| The Choudhries' spokesman confirmed that the list, seen by the Guardian, was genuine but said there was "no reason why Mr Choudhrie is still on such a list". | The Choudhries' spokesman confirmed that the list, seen by the Guardian, was genuine but said there was "no reason why Mr Choudhrie is still on such a list". |
| He said Choudhrie was probably placed on the list while the CBI was conducting its inquiries, and could have been removed from it now that both investigations have been "formally closed". The Indian CBI did not respond to requests for comment. | He said Choudhrie was probably placed on the list while the CBI was conducting its inquiries, and could have been removed from it now that both investigations have been "formally closed". The Indian CBI did not respond to requests for comment. |
| Of the Choudhries' arrests in connection with the Rolls-Royce bribery scandal, the spokesman said: "The allegations made against Bhanu and Sudhir Choudhrie are strongly denied. Full co-operation is being given to the authorities." | Of the Choudhries' arrests in connection with the Rolls-Royce bribery scandal, the spokesman said: "The allegations made against Bhanu and Sudhir Choudhrie are strongly denied. Full co-operation is being given to the authorities." |
| Rolls-Royce is alleged to have used middlemen to bribe Tommy Suharto, the son of Indonesia's former president General Suharto, with $20m (£13m) and a blue Rolls-Royce car. | Rolls-Royce is alleged to have used middlemen to bribe Tommy Suharto, the son of Indonesia's former president General Suharto, with $20m (£13m) and a blue Rolls-Royce car. |
| John Rishton, Rolls-Royce's chief executive, has stressed that the company will not tolerate illegal conduct. He said: "I want to make it crystal clear that neither I nor the board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance." | John Rishton, Rolls-Royce's chief executive, has stressed that the company will not tolerate illegal conduct. He said: "I want to make it crystal clear that neither I nor the board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance." |
| Choudhrie, who is in his 70s, was named by Clegg as a potential future peer last year. Last autumn it was reported that he had fallen off the prospective peer list following a damning official report into hospitals and care homes he owns. | Choudhrie, who is in his 70s, was named by Clegg as a potential future peer last year. Last autumn it was reported that he had fallen off the prospective peer list following a damning official report into hospitals and care homes he owns. |
| The arrests of the Choudhries in connection with allegations of bribery is particularly embarrassing for the Lib Dems because it comes after major donor Michael Brown was sentenced to seven years in jail for theft, furnishing false information and perverting the course of justice. After nearly four years on the run, Brown, who gave the party £2.4m in 2005, was sent to prison in 2012. The party has not paid the money back. | The arrests of the Choudhries in connection with allegations of bribery is particularly embarrassing for the Lib Dems because it comes after major donor Michael Brown was sentenced to seven years in jail for theft, furnishing false information and perverting the course of justice. After nearly four years on the run, Brown, who gave the party £2.4m in 2005, was sent to prison in 2012. The party has not paid the money back. |
| The escalation of the SFO's Rolls-Royce bribery investigation could also prove embarrassing for David Cameron and the royal family, who have spoken of their pride in one of Britain's best-known companies. | The escalation of the SFO's Rolls-Royce bribery investigation could also prove embarrassing for David Cameron and the royal family, who have spoken of their pride in one of Britain's best-known companies. |
| The prime minister has praised Rolls-Royce as an enterprise "of which the whole country can be proud", and the Duke of Cambridge has described it as "one of the United Kingdom's great global companies". | The prime minister has praised Rolls-Royce as an enterprise "of which the whole country can be proud", and the Duke of Cambridge has described it as "one of the United Kingdom's great global companies". |
| Additional reporting by Solomon Hughes | Additional reporting by Solomon Hughes |
| • Since publication, a spokesman for Mr Sudhir Choudhrie has pointed out that Mr Choudhrie was not personally named as a suspect in relation to the CBI investigation into the purchase of Barak missiles. While Mr Sudhir Choudhrie is acknowledged as the head of the family, he ceased to be a director of any of the Group's companies in 2007. |