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AAR Corp. has reached an agreement to pay $55 million to resolve allegations from both the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) concerning claims that the aviation services provider engaged in the practice of bribing government officials in Nepal and South Africa to secure business. The resolution was announced on Thursday.

Based in Illinois, AAR entered into an 18-month nonprosecution agreement with the DOJ, which asserts that the company engaged in a conspiracy to offer bribes to government officials to maintain and expand its business relationships with state-owned airlines in Nepal and South Africa between 2015 and 2020. According to the DOJ, the alleged scheme resulted in nearly $24 million in profits for AAR.

Under the terms of the nonprosecution agreement, AAR has committed to paying a penalty of approximately $26.4 million and an additional $18.6 million in administrative forfeiture. Additionally, AAR has agreed to cooperate fully with the DOJ's Criminal Division and the U.S. Attorney's Office for the District of Columbia on any future or ongoing criminal investigations, and to continue enhancing its compliance program throughout the duration of the agreement.

Prosecutors allege that in Nepal, AAR successfully secured a contract with Nepal Airlines Corp. concerning the sale of two Airbus A330-200 aircraft by offering and paying bribes to Nepali officials through various intermediary firms. In South Africa, the company similarly obtained a contract with South African Airways Technical by offering and paying bribes through a third-party agent.

In a separate yet related agreement with the SEC, AAR will also pay $29.2 million in disgorgement and prejudgment interest. Additionally, Deepak Sharma, a former executive at an AAR subsidiary, reached a settlement with the SEC. Sharma had previously pleaded guilty to his role in the bribery scheme, which involved violations of the Foreign Corrupt Practices Act (FCPA) in August, as per the DOJ. As part of the SEC settlement, Sharma has agreed to pay a total of $184,597 in disgorgement and prejudgment interest, with $130,835 having been paid already through a forfeiture order in connection with his previous agreement with the DOJ.

According to the SEC, Sharma played a central role in orchestrating and implementing the bribery scheme to secure a contract for the sale of the Airbus aircraft between 2015 and 2018, which was valued at roughly $210 million. He was also involved in the South African Airways contract, the agency noted.