Responding to the report, first published in The Indian Express today, Foreign Secretary Shiv Shankar Menon said: “We are looking into the allegations. Now they are only allegations...we will get back to you when we have something to say about it.”

According to the grand jury indictment, the FBI has cited faxes, e-mails, telephone records and documents alleging that these point to involvement of Indian government officials — not identified by name — certifying the purchase of special microprocessors for the Tejas Light Combat Aircraft project.

The FBI has alleged that in February 2004, an Indian government official posted at the Indian embassy in Washington signed an “Inspection & Acceptance Certificate on behalf of the Government of India.” This certificate was meant for a vendor in Newburyport, Massachusetts, from whom Cirrus Electronics purchased the microprocessors.

Cirrus’s US head Parthasarathy Sudarshan and his colleague Mythili Gopal are now under arrest. These were the microprocessors allegedly delivered for the Tejas project to the Aeronautical Development Establishment (ADE) in India, the FBI says.

According to the indictment, “...he (Indian embassy official) attested that the vendor....had tested 380 i960 microprocessors and that 377 (of these) satisfied the criteria set forth in ADE’s purchase order for the items.”

Besides the embassy official, another official from the ADE has been cited as “co-conspirator.” Both these officials allegedly travelled to Newburyport for inspections and tests. The travel was arranged by Cirrus.

According to the FBI, this is the sequence of events related to the sale of microprocessors for Tejas:

• Dec 12, 2003: ADE makes a request for price quotation for 500 i960 processors to Cirrus Singapore.

• April 8: ADE “executed the purchase order for Cirrus to acquire 500 i960 processors for use in Tejas Light Combat Aircraft”.

• Sept 29: Sudarshan travelled to Newburyport to meet the vendor and “discuss an upcoming visit to the vendor with co-conspirator A (reference used for the Indian embassy official)”, during which the official will “observe testing of the microprocessors”.

• January 28, 2004: Sudarshan sent an e-mail to the Indian embassy official confirming the visit.

• February 15-20: Embassy official visits the vendor with Sudarshan and observes testing of the microprocessors.

Sudarshan, the FBI alleges, “falsely assured representatives of the vendor that i960 microprocessors were going to remain in Singapore for use in a joint Government of India project with Lockheed Martin”.

Any sale for defence purposes to entities like ADE, the FBI states, is covered by the US Arms Export Control Act and requires a license. This, they argue, explains the “false” story of a project with Lockheed Martin.

According to the indictment, about a year after the visit by the Indian embassy official, Sudarshan had a telephone conversation with the ADE official in India. They discussed the “upcoming trip” of the official to witness testing of the microprocessors at the same location.

In the case of heat-resistant Static Random Access Memory (SRAM) computer chips for the Vikram Sarabhai Space Centre (VSSC), which the FBI claims, could be used for missile-launch systems, Cirrus allegedly violated US Department of Commerce rules that shipping such items to any organisation in the prohibited list of entities needed a license.

VSSC is in that list and the procedures for such licenses are stringent.

The indictment states that on one occasion in May 2003, the Phoenix-based vendor requested “an end-use statement for 10 SRAMs”. To this, Sampath Sundar, Cirrus’s Director of Operations in Singapore, sent an e-mail “falsely identifying the end-user of the SRAMs as the Naval Physical & Oceanographic Laboratory (NPOL) in Kochi...and the end-use as the development of electronic hardware for oceanographic instrument.”

More than a year later, in September 2004, the vendor sent an e-mail to Cirrus disclosing that it found the NPOL end-user statements “fraudulent” and that it was ending all business and was even considering to report the matter.

At this point, the indictment states, Sudarshan wrote an e-mail to Mythili Gopal and his Cirrus Bangalore head A K N Prasad: “On reading the e-mails (from vendor) do not get panic. At the end of the game, it is I...who needs to face the music”. He instructed Prasad, according to the indictment, to “go to VSSC and explain them that our intention is not to make profit on this order but to service VSSC and ascertain if VSSC has got some clout over NPOL”.