A criminal case has been registered under the Prevention of Money Laundering Act
The Enforcement Directorate has registered a money laundering case against retired Air Chief Marshal S.P. Tyagi and others in connection with the alleged payment of over €21.4 million by AgustaWestland to IDS Infotech India and its erstwhile Tunisia subsidiary. The amount was purportedly used to pay kickbacks for the Rs. 3,700-crore VVIP chopper deal.
The fund transfers were made in seven instalments to both the companies between 2007 and 2011. IDS Infotech received a total of €2.14 million and the rest went into the accounts of IDS Tunisia.
The agency, which has already been probing suspected violation of foreign exchange rules in the matter, records that AgustaWestland had initially declared 4,572 metres as the flying capability of its helicopters, as against the mandatory requirement of 6,000 metres. It was, therefore, disqualified in 2002.
However, the then Air Chief Marshal approved reduction of the required flying capability to 4,500 metres despite prior vehement opposition of the Indian Air Force. This allowed the supplier to bid for the contract.
Even before Mr. Tyagi became the Air Chief Marshal, his ascendency to the highest post was clear much before November 2004. The ED alleges that the same year, his cousins Sanjeev (Julie), Rajeev (Dosca) and Sandeep Tyagi, who knew alleged middlemen Guido Haschke and Carlo Gerosa, entered into a consultancy contract with Gordian Services (Tunisia), a firm both the suspects were associated with.
From Gordian Services, the Tyagi brothers received €1.26 lakh after May 2004 and 2 lakh euros after February 2005, alleges the ED. The two transactions were “camouflaged” in the form of consultancy fee, but they corresponded with developments taking place in the alteration of the mandatory service ceiling of the helicopters.
The agency alleges that then AgustaWestland (UK) CEO Bruno Spagnolini started paying bribes to Mr. Haschke and Mr. Gerosa in the garb of multiple consultancy contracts between his company and Gordian Services. AgustaWestland, in one such contract, agreed to appoint Gordian Services as a consultant in the VVIP chopper deal, subject to materialisation.
Subsequently, Mr. Spagnolini along with Giuseppe Orsi of parent Italian firm Finmeccanica entered into engineering contracts with IDS Infotech and IDS Tunisia as a “subterfuge” to pay kickbacks to middlemen and public servants in India. It is alleged that of the total €51 million paid by AgustaWestland, British citizen Christian Michel received €30 million in the deal and the remaining went to Mr. Haschke and Mr. Gerosa.
Probing agencies accuse Gautam Khaitan, former legal advisor to IDS Infotech, of introducing the middlemen to company chairman Satish Bagrodia and managing director Pratap K. Aggarwal. While from November 2007 to April 2010, the company received €2.1 million from AgustaWestland, IDS Tunisia was later incorporated as a 100 per cent subsidiary of IDS Infotech.
ED records state that the Tunisia firm was soon sold off to Mr. Haschke and Mr. Gerosa, another company named Aeromatrix incorporated and the business of IDS Infotech transferred to it. The kickback money was then allegedly channelized through Aeromatrix as it started receiving purchase orders from IDS Tunisia in the form of “fictitious or over” invoices.
Investigations revealed that 82 per cent of shares of Aeromatrix was held by Infotech Design System (IDS) Mauritius and 17 per cent by Mr. Khaitan.
The ED found that IDS Tunisia had purportedly raised bills for 24.37 million euros on AgustaWestland, whereas IDS Infotech India and Aeromatrix were paid only 1.88 million and 3.8 million euros, respectively, for the same job. Based on the findings, the agency suspects that IDS Tunisia inflated the invoices and the money was diverted to India via Mauritius to pay bribes.
As the ED has now registered a criminal case under the Prevention of Money Laundering Act, officials believe that obtaining necessary information on the case from the countries concerned would be much easier. The “proceeds of crime” can also be attached under the Act.