The Defence ministry Tuesday ordered a CBI probe into corruption allegations in the Rs 3,546 crore deal to procure VVIP helicopters for the Indian Air Force after the CEO of the Italian firm supplying them was arrested for his suspected role in arranging bribes to bag the contract.
Giuseppe Orsi, CEO of Finmeccanica group, was arrested by Italian authorities Tuesday morning and arrest warrants were also issued for the two Switzerland-based middlemen who allegedly paid bribes in India — Italian nationals Guido Haschke and Carlo Gerosa. Britain-based consultant Christian Michel has also been named in the chargesheet.
Orsi was arrested for his alleged role in arranging bribes amounting to 51 million euros to sell 12 AW 101 choppers to the IAF. The Indian Express was the first to report the scandal and had detailed the alleged nexus of middlemen involved in the deal in a series of reports last year.
Hours after the arrests, the Defence ministry issued a detailed statement which said that it had tried to get information about the probe from Italy and Britain — the contract was signed with AgustaWestland, UK —but had been unsuccessful. The ministry decided to ask the CBI to take over the probe due to the arrests.
"Since no specific input has been received so far from the two governments, MoD has decided to refer the case to CBI for inquiry," the statement said. "The contract signed with AgustaWestland includes specific contractual provisions against bribery and the use of undue influence as well as an Integrity Pact."
With the CBI taking over the case, the focus is expected to turn on the Indians named in the Italian probe for their alleged role in the kickbacks. Besides the two Italian middlemen, the preliminary report filed by Italian prosecutors had named an Indian businessman, Sanjeev `Julie' Tyagi, as an accused in the case.
The arrest is seen as a major blow for Finmeccanica, the parent company of AgustaWestland, that has repeatedly denied that any bribes were paid. After Orsi's arrest, the company said its "operating activities and ongoing projects will continue as usual".
"In addition, Finmeccanica expresses support for its chairman and CEO, with the hope that clarity is established quickly, whilst reaffirming its confidence in the judges," the company said in a statement. Orsi, who was heading AgustaWestland when the deal was signed in 2010, is now the CEO of the parent Finmeccanica.
While a probe has been ordered and the Italian firm is in danger of being blacklisted if its officials are found guilty of violating the stringent anti-corruption laws, sources said it is still too early to say that the deal will be cancelled. IAF officials said that out of the 12 VVIP choppers, three have already arrived in India and are undergoing flight tests.
Three more choppers are expected by the middle of this year, followed by the rest. As of now, the order has not been terminated, with the Indian government likely to wait for a CBI report before taking a decision.
As reported by The Indian Express, the Italian probe is working on the lines that AgustaWestland was favoured by the IAF for the mega contract after bribes were allegedly paid to first alter the technical requirements and then to swing the contract in its favour.
The technical requirements of the contract were changed drastically before September 2006 when the tenders were floated. While the original requirements held that the choppers should be able to attain an altitude of 6,000 m, this was reduced to 4,500 m before floating tenders.
This change also enabled AgustaWestland to enter the competition as it did not qualify earlier due to the 6,000 m altitude requirement.
AN EXPRESS STORY
24 FEB '12 The first report: 'Indian helicopter deal sparks corruption row in Italy'. Next day, Defence ministry sought report from Indian mission in Italy
25 APR The alleged bribe: 'India helicopter deal: Italy probes Euro 51 mn payoff'
28 APR Key middleman Guido Haschke's India connection: 'Italian under probe was active in India defence sector'
23 OCT The Express reports role and connections of UK-based Christian Michel, co-accused in the case
25 OCT The Express begins series of reports tracking the Italian investigation: role of Finmeccanica's India head; Indian middlemen, including a former IAF chief's kin; the middlemen's taped conversations
NOV 1 Key disclosure: probe has found India tweaked technical requirements of contract to get AgustaWestland into race. On Dec 3, The Express reported that a govt probe had established the tweak
Manu Pubby : New Delhi, Wed Feb 13 2013, 03:42 hrs