Within hours of the arrest of Giuseppe Orsi, CEO of state-owned Italian aerospace company Finmeccanica, on corruption charges, the defence ministry asked the CBI to probe India’s Rs. 3,760-crore deal with the company for 12 VVIP helicopters.
Italian prosecutors suspect that Orsi was involved in paying more than R450 crore in bribes to middlemen for the contract for supplying the AgustaWestland AW101 helicopters to the Indian Air Force in February 2010.
Three AW101 choppers have already been delivered to the IAF under the contract that covers five-year product support and crew and technician training, while three more are expected to fly in by the middle of this year.
AgustaWestland, a subsidiary of Finmeccanica, had bagged the Indian contract, beating its US rival, Sikorsky. AgustaWestland chief Bruno Spagnolini has been put under house arrest. It is learnt that the prosecutors also moved for extradition of two alleged middlemen who live in Switzerland.
Finmeccanica, however, responded to the news of Orsi’s arrest by expressing support for its top executives and reaffirming confidence in the judges.
The arrest comes after more than 15 months of investigation. India, meanwhile, sought details of the probe from Italy and the UK since AgustaWestland is headquartered in the UK and is building the choppers at its Yeovil factory in that country.
“No specific inputs were, however, received substantiating the allegations” although Orsi had been arrested in connection with the deal with India, a defence ministry official said, explaining the reason why the ministry had decided to refer it to the CBI.
The BJP sought an explanation from the government as to why India had not taken any action so far while Italy had clamped down on Finmeccanica’s top executives. “Where’s the money gone?” asked BJP’s Prakash Javedekar.
The ministry official said, “The contract signed with Augusta Westland includes specific contractual provisions against bribery and the use of undue influence as well as an integrity pact.”
But the ministry is unlikely to invoke those provisions to penalise the Finmeccanica unit till the CBI completes its investigation.
The military versions of the helicopter are in service with the UK's Royal Air Force, Royal Navy and the Italian Navy. The AW101 has different configurations to carry out diverse roles, such as troop transport, casualty evacuation, search and rescue, anti-submarine and anti-surface warfare, disaster relief and airborne surveillance.