The Defence Ministry on Tuesday ordered an inquiry by the Central Bureau of Investigation (CBI) into the allegations of bribery and financial irregularities in the Rs. 3,600 crore VVIP helicopter deal with Italian defence firm Finmeccanica. The 2010 contract involved the supply of 12 Agusta Westland choppers.

Defence Minister A. K. Antony ordered the CBI probe soon after it became known that Giuseppe Orsi, the head of Finmeccanica, was arrested in Milan on Monday in relation to a probe into international corruption.

“He [Orsi] is suspected of involvement in the payment of bribes regarding the sale to the Indian government of 12 helicopters produced by Finmeccanica’s subsidiary AgustaWestland,’’ Italian news agency Ansa said.

Prosecutors suspect that around 50 million euros (about Rs 362 crore), about 10 per cent of the contracted amount, were ploughed back as kickbacks to ensure AgustaWestland won the contract, the agency reported.

According to media reports quoted in an AFP despatch from Rome, the Italian police arrested the chief executive of Finmeccanica for corruption and embezzlement in relation to alleged bribes given to the Indian government.

Giuseppe Orsi had been under investigation for months and had denied any wrongdoing in the India deal. The report said the magistrate in the case also issued an order for the head of AgustaWestland, Bruno Spagnolini, to be put under house arrest.

Two suspected intermediaries in the bribes who reside in Switzerland have also been targeted with extradition requests, Italian media reported. Italy’s Prime Minister, Mario Monti, said in an interview with Italian television: “Magistrates will do their work. I’m sure they will do it thoroughly and in the best way possible.”

India had inked the deal in February 2010 to acquire a dozen three-engine AW-101 helicopters from AgustaWestland for the Indian Air Force’s elite Communication Squadron, which ferries around the President, PM and other VVIPs.

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