A yearlong investigation published Sunday by the daily La Libre Belgique said the Belgian army sold 35 helicopters and two airplanes to the unnamed Brussels company from 2009-12.
One of the company's directors, identified by the initials D.V., was suspected by police of being involved in money-laundering and arms trafficking and by the defense intelligence services of trafficking in stolen vehicles, the newspaper said.
The investigation revealed four of 23 Alouette II helicopters assigned to the company arrived in Madagascar in late 2009 and by the next year were being used by the army of President Andry Rajoelina, who had taken power in a coup backed by the military.
The newspaper said the results of the investigation revealed that when it comes to sensitive material, it is likely Belgian military officials don't check if potential buyers are known to the police or intelligence, meaning some types of equipment could easily be used by criminals or terrorists, or sold to groups in problematic countries such as Madagascar.
As part of a refinancing plan, the Belgian army frequently sells off old equipment such as boots, helmets, generators, trailers, as well as helicopters, airplanes and armored vehicles.
The procedures for selling such used aircraft include the same criteria as for other types of weapons systems, Belgian Defense Department spokesman Capt. Bart Ghys told La Libre Belgique.
Because the new owner had headquarters in Belgium, it didn't need an export license on sales of equipment. But, Ghys said, the firm has signed a "final user certificate," in which it is required to seek "appropriate authorization" if it wishes to export the devices themselves or their parts.
But the firm nevertheless exported military equipment without informing authorities and without obtaining a regional export license, the newspaper said.
Despite the use of material by the Madagascar army and the absence of the necessary licenses, the Belgian army and the Brussels firm continued to work together, the investigation said.
In addition to the "demilitarized" Alouette II helicopters, it was also awarded AgustaWestland A109 helicopters and two Airbus A310s.
Even though the aircraft were "demilitarized," they would probably not be used for civilian purposes, Nils Duquet of the Flemish Peace Institute told the newspaper.
"It is unlikely that helicopters sold by the Belgian army, even unarmed, are not considered military equipment," he said. "Moreover, that the army requires an end-user certificate and includes a re-export clause in the contract is a clear indication that the helicopters are considered military equipment."
Records from criminal proceedings indicated D.V. came under the scrutiny of authorities in Charleroi for possible links to organized crime and arms trafficking in 2003.
A police report indicated a company bank account containing $19.5 million was suspected to be the proceeds of smuggling operations disguised as fictitious exports to Madagascar.
The report alleged a boat owned and leased by two companies in which D.V was involved "could be used to transport arms to African countries."
Prosecutors declined to go forward with a case against D.V., who denied to the newspaper that he had committed any crimes.