AAR CORP. & Former Executive Face $55 Million Penalty Over International Bribery Schemes

AAR CORP., a global aerospace and defense aftermarket solutions company, has agreed to pay over $55 million to resolve U.S. charges related to bribery schemes involving officials in Nepal and South Africa.

Between 2015 and 2020, AAR admitted to conspiring to pay bribes to government officials to secure business with state-owned airlines in Nepal and South Africa. In Nepal, the company secured a contract for the sale of two Airbus A330-200 aircraft to Nepal Airlines Corporation by offering and paying bribes through intermediary companies. In South Africa, AAR obtained an aircraft component support contract with South African Airways Technical, a subsidiary of South African Airways, by offering and paying bribes through a third-party agent.

As part of the resolution, AAR entered into an 18-month non-prosecution agreement with the U.S. Department of Justice (DOJ) and agreed to pay a $26.4 million criminal penalty. Additionally, the company consented to the Securities and Exchange Commission's (SEC) order to pay approximately $29.2 million in disgorgement and prejudgment interest, bringing the total settlement amount to over $55 million.

Deepak Sharma, a former executive of an AAR subsidiary, pleaded guilty in August 2024 for his role in the Nepal scheme. Julian Aires, a third-party agent of AAR, pleaded guilty in July 2024 for his involvement in the South Africa scheme.

AAR's cooperation with the investigations and its remedial actions were acknowledged by both the DOJ and SEC. The company has stated that it remains committed to operating in an ethical and compliant manner.

This case underscores the importance of robust compliance programs and internal controls to prevent corrupt practices in international business operations. Companies are reminded that adherence to the Foreign Corrupt Practices Act (FCPA) is essential to maintain fair and lawful business practices globally.

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