Brazil opens two criminal probes into $300 million Covaxin deal between Bharat Biotech and its health ministry

The organised crime unit of the federal police of Brazil has opened up two criminal investigations to probe the $300 million deal between India’s Bharat Biotech and Brazil’s health ministry, regarding the purchase of 20 million doses of Covaxin.

The cases are also under the scanner of the comptroller general’s office and a 11-member parliamentary committee of federal senators. The Wire reported that the federal district attorney’s office will also conduct a separate investigation.

This happened after the federal prosecutor, Luciana Loureiro, found “criminal evidence” in the contract, as opposed to what was thought to be a case of “administrative improbity”. The prosecutors will take into consideration the vaccine’s high price, the reason it wasn’t delivered and certain clauses of the contract were left unfulfilled, aside from “irregularities”.

These 'irregularities' were brought to light by a health ministry official, Ricardo Miranda, who exposed that he was being pressured to clear a $45 million invoice, raised on March 19, by a Singapore-based firm, Madison Biotech. All of this has led to impeachment calls for Jair Bolsonaro.

Bharat Biotech released a statement, “Announcement on Procurement Process”, on Wednesday to clarify that it got an emergency use authorisation on June 4, 2021. Official reports from the Brazilian Health Regulatory Agency (ANVISA) show otherwise. ANVISA has only allowed “partial authorisation” under “controlled conditions” in Brazil. They also sought the complete analysis of Covaxin’s phase-3 trials.

On the same day, before the company had released its statement, ANVISA suspended their “deadline to complete the evaluation of the request for emergency use of Covaxin”, which is usually 30 days. Bharat Biotech had filed its application only on Tuesday, and ANVISA took the decision because it found mandatory documents missing. Back in March, ANVISA had rejected the import of Covaxin into Brazil.

Covaxin’s phase-3 trials were cleared on May 13, but ANVISA replied to a query by The Wire saying that “exceptional importation” cannot be interpreted as EUA.

Bharat Biotech also needs to clarify about why its partner, Madison Biotech, sent an invoice to Brazil, when the former is saying that it has received no advance payments.

However, Onyx Lorenzoni, chief of presidential secretariat, claims that the invoice is a fraud by Miranda and his brother. Lorenzoni displayed two invoices at a press conference, one of which he claimed was real and asked for $45 million.

In the second invoice, which was also raised on March 19, Bharat Biotech is the manufacturer and Madison Biotech, the exporter, and the terms require “100% advance payment”. The number of doses is three million. In the third invoice, everything remains the same but terms change to “according to the agreement”. On March 20, Miranda had already met Bolsonaro with the first invoice, and he has stated on record that he objected to it.

Both the firms have not stated why the invoice was changed thrice. A lawyer told The Wire that a firm not in the contract could not raise an invoice, and all business done in Brazil needs to be translated into Portugese documents and notarised. But Lorenzoni had claimed that Madison Biotech is a “subsidiary” of Bharat Biotech, and had shown a Letter of Declaration from Bharat Biotech International Limited that pledged that Madison Biotech was authorised to supply and distribute BBIL’s products. Bharat Biotech had claimed the same.

But Madison Biotech is a private company founded by Dr Krishna Ella on February 14, 2020 and the company’s director Krishnamurthy Sekar has signed the invoices.

The controversies surrounding the Covaxin deal have caused a furore in Brazil against President Bolsonaro. Leaders of various organisations have submitted a “super petition” to the Speaker of the Chamber of Deputies for Bolsonaro’s impeachment. The petitions against him are now over 120. Street protests against the President will also take place on Saturday. #CovaxinGate has already started trending on social media as well.