UPDATE 1-India arrests officials at aviation regulator, Reliance in drone bribery probe

India's federal crime fighting agency said it has arrested an official from the country's aviation regulator and a Reliance Industries executive on allegations of bribery related to securing regulatory approvals to import ‌drones.

In a statement late on Sunday, the Central Bureau of Investigation (CBI) said it had acted following a tip-off that the Reliance executive and the government official had settled on an amount of 1.5 million rupees ($16,000) to process three applications related to drone imports by Asteria Aerospace. The CBI named ‌the two men as Mudavath Devula, a deputy director general at the Directorate General of Civil Aviation (DGCA), and Bharat Mathur, a ‌senior vice president from Reliance.

Asteria is a subsidiary of Reliance Industries' technology arm Jio Platforms, which is led by billionaire Mukesh Ambani. "Mathur was engaged as a consultant. We are not aware of any transaction involving him of the nature being referred to, nor have we approved any such unauthorised transaction,” a Reliance Industries spokesperson said in a ⁠statement.

The DGCA ​and Asteria did not respond ⁠to Reuters requests for comment. Devula and Mathur could not be immediately reached as they were in police custody. The CBI initiated the investigation on an "allegation that the accused public ⁠servant of DGCA demanded undue advantage from the private persons in lieu of issuing approvals and permissions of applications pending with DGCA," the statement said.

Asteria's website ​says it is a drone technology company providing intelligence from aerial data, and develops customised drone solutions. It has more than ⁠400 drones deployed so far. Ambani's Jio Platforms is also gearing up to file papers seeking regulatory approvals for a Mumbai listing, in what is likely to be India's biggest-ever ⁠stock ​offering.

The arrest is also a setback for India’s aviation watchdog, the DGCA, which is already grappling with severe staffing shortages while overseeing a sector where airlines are frequently found to have breached safety norms. The police arrested the two men in New Delhi and seized 250,000 ⁠Indian rupees in cash. Further searches at premises of the DGCA official and other "private persons" led to the seizure of 3.7 million Indian ⁠rupees ($40,000), and gold and silver coins, ⁠the CBI said.

The CBI's list of the two's suspected offences, detailed in a publicly released case document, included criminal conspiracy and "bribing a public servant by a commercial organisation". India ranked 91 on Transparency International's Corruption Perceptions ‌Index last year from ‌76 a decade ago.