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Italian chopper deal: India orders probe after CEO's arrest
Tuesday February 12, 2013 10:35:45 PM,
IANS
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New Delhi/Rome: India
Tuesday ordered a probe into the $750 million deal for 12 VVIP
AgustaWestland helicopters following the arrest of the chief of
its parent company - Italy's Finmeccanica on corruption charges in
the contract.
Finmeccanica CEO Giuseppe Orsi, who had been under investigation,
was arrested Tuesday.
A report in the online version of Corriere della Sera newspaper
said Orsi had been arrested for bribes allegedly paid to secure
the sale of 12 helicopters to India. Three other people had been
placed under house arrest as part of the probe, including Bruno Spagnolini, the head of Finmeccanica's helicopter unit
AgustaWestland, said the report.
Orsi has been under investigation for embezzlement for several
months. He has always denied any wrongdoing and has vowed to clear
his name.
Prosecutors allege he profited illegally from the sale of 12
helicopters to India.
Italy's Prime Minister, Mario Monti, said in an interview with
Italian television: "There is a problem with the governance of
Finmeccanica at the moment and we will face up to it."
"Magistrates will do their work. I'm sure they will do it
thoroughly and in the best way possible." The Italian government
owns a 30 percent stake in Finmeccanica.
The contract for the helicopters had been signed in February 2010.
This is not the first time that the allegations have surfaced.
Three of the helicopters have already been delivered to the Indian
Air Force (IAF), the first of them in December 2010.
Some 30 percent of the contracted amount has already been paid and
the remaining would have to paid as and when the remaining nine
machines are delivered. As of now, no wrongdoing has been proved,
said informed sources.
A scale model of the helicopter had formed part of the IAF
tableaux during the Jan 26 Republic Day parade.
Explaining the rationale for the CBI probe, a defence ministry
statement said: "Press reports have appeared from time to time on
the subject of Italian prosecutors having initiated a probe into
the alleged unethical dealings of M/s. Finmeccanica, Italy. The
probe had been widened to include the Indian contract signed with
M/s. AgustaWestland.
"In view of the media reports" the defence ministry, through the
external affairs ministry, "had sought information from the
governments of Italy and UK. No specific inputs were, however,
received substantiating the allegations".
"In a recent report, appearing in certain sections of the media,
it has been reported that the chairman of M/s. Finmeccanica has
been arrested in connection with the investigation into the case
of the sale of helicopters to India.
"The contract signed with M/s. AgustaWestland includes specific
contractual provisions against bribery and the use of undue
influence as well as an Integrity Pact," the ministry statement
said.
Since no specific input has been received so far from the two
governments, MoD (ministry of defence) has decided to refer the
case to CBI for inquiry," the statement added.
Finmeccanica, in a terse release from Rome on the issue, backed
Orsi "with the hope that clarity is established quickly, whilst
reaffirming its confidence in the Judges".
It also said that the "operating activities and ongoing projects
of the Company will continue as usual".
The IAF has sought the AgustaWestland choppers as a replacement
for its Mi-17 cargo helicopters that have been modified for VVIP
deployment. The Comptroller and Auditor General has adversely
commented this, saying it was a waste of resources.
The Indian external affairs ministry said it has asked Italian
authorities for information about the issue.
"The Indian mission in Rome has asked the Italian government for
information that they may have in connection with allegations
which have been made on the matter.. We have not received any
response from them so far, the argument being that this is in
Italy a judicial process," external affairs ministry spokesman
Syed Akbaruddin told reporters in New Delhi Tuesday.
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