CBI likely to face Italian hurdles to choppergate probe

With the marines issue snowballing into a major diplomatic row between New Delhi and Rome, and the Central Bureau of Investigation lodging a formal case against Finmeccanica and others on allegations of bribery in the Rs. 3,600-crore VVIP chopper deal, all major Indian initiatives with Italy, particularly in the defence field, may witness a slowdown in the months to come.

Finmeccanica, which has a fairly large footprint in India in several defence projects including in the design of the ambitious first indigenous aircraft carrier project under way in Kochi, is also likely to adopt a “go slow” approach in its dealings with this country.

Senior defence analyst Commodore (Retd.) C. Uday Bhaskar feels that Italy’s refusal to send back two of its marines, facing trial in India for killing two Indian fishermen off Kerala, and the CBI probe turning up the heat on the defence giant and its subsidiary AgustaWestland would have a “large political impact’’ as there are long-term stakes involved.

The Italian government must have done introspection and studied the situation before reneging on its promise to send back the marines to stand trial in India. The CBI, which sent its team last month to Milan in connection with the probe into the chopper bribery scandal, is likely to face hurdles in enlisting the help of Italian authorities to move ahead with its investigation, the analyst said on Wednesday.

The news of CBI searches in the New Delhi offices of Finmeccanica and AgustaWestland figured prominently in the despatches of Italian news agency ANSA. It said Indian investigators accused two middlemen of paying bribes to swing the deal for 12 choppers in favour of AgustaWestland. It also referred to the tough line taken by Defence Minister A. K. Antony in Parliament, saying India would “blacklist” any company violating anti-corruption laws. The Defence Ministry has asked Finmeccanica’s new CEO Alessandro Pansa for any information he might be able to provide on suspected bribes.

The Finmeccanica group, which is battling bribery allegations and the arrest of its CEO and chairman, deals with helicopters, defence electronics and security and aeronautics.

Both Finmeccanica and AgustaWestland were prominent participants in the Aero India show in Bangalore last month. AgustaWestland exhibited its range of helicopters, including the controversial AW101.

Tie-ups with Indian firms

The presence of Finmeccanica in India dates back to the early 1970s when the group supplied 41 Sea King helicopters to the Indian Navy. The group has a tie-up for key projects with industry stalwarts BHEL, BEL, Bharat Dynamics Limited, HAL and Tata sons.

Finmeccanica's Subsidiaries have bagged contracts worth thousands of crores of rupees from the Indian government and have a huge presence in many sectors. These companies are SELEX Galileo, Ansaldo STS and AgustaWestland.

Ansaldo STS is a multinational technology company which produces signalling and automation systems for use by rail and rapid transit operators. Ansaldo STS is headquartered in Genoa, Italy, and Finmeccanica has a 40 per cent stake in the company. The company has 240 employees in India and, according to industry sources, captured a major market share in the railway signal market.

SELEX ES supplied navigation and communication systems for main Indian avionic platforms in 1995 and ATC VHF systems to the Airports Authority of India and a precision approach radar to the Indian Air Force in 2001.

In defence systems, OTO Melara, another group company, has supplied large, medium and small calibre naval guns to the Indian Navy.

“India is a country of paramount importance to Finmeccanica. The sustainable economic growth, the increasing investments in defence, security and infrastructure, the large industrial base and the skilled workforce have encouraged Finmeccanica’s presence and investment with a long-term vision. For the coming years, our operations in India will be aimed at improving our presence and increasing our reputation as a solid and reliable partner,” Finmeccanica says.

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