India moves to scrap VVIP chopper deal

Vinay Kumar
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Show-cause issued to AgustaWestland

Giuseppe Orsi
Giuseppe Orsi

: Even as the Central Bureau of Investigation began an inquiry into allegations of bribery in the Rs. 3,600-crore deal with AgustaWestland U.K. for procuring 12 VVIP choppers, India on Friday sought to scrap the pact that has been marred by charges that kickbacks worth Rs. 362 crore were paid by Italian parent company Finmeccanica to bag the contract.

The Defence Ministry issued a show-cause notice to AgustaWestland, asking it to explain within a week the bribery allegations, Ministry spokesman Sitanshu Kar said on Friday. The notice asked the company why the deal, signed in February 2010, should not be scrapped.

“The Defence Ministry issued a formal show-cause to AgustaWestland, seeking the cancellation of the contract and taking other actions as per terms of the contract,’’ the spokesman said. On Thursday, the Ministry warned of strict legal action, including invoking the integrity pact that provides for cancellation of the contract if bribes are paid and recovery of the money paid.

Noting that there were reports in Italy on investigation in to the alleged scam in the deal and Finmeccanica CEO Giuseppe Orsi being arrested in Milan on Tuesday, India had made a fresh request for information in the matter, sources in the government here said.

(A similar request was made by India in the recent past and Italy’s stand was that its judiciary was independent and was pursuing the probe.)

The sources said the Indian mission in Rome was requested to make a formal application to the court authorities to get an authenticated copy of the preliminary report of the Italian prosecutors that had levelled allegations of payoffs to agents and middlemen that reportedly helped the Italian defence giant to swing the deal in its favour.

The Defence Ministry also asked AgustaWestland to state whether any money was illegally paid to any Indian entity or individual. India has received three of the 12 helicopters and paid up to 30 per cent of the amount but suspended further payments and put on hold the delivery of the remaining choppers. Reports appeared in October-November 2012, alleging that Finmeccanica had clinched contracts in four countries due to the contacts of the former Premier, Silvio Berlusconi, and his trusted aides.

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