Govt defers approval to AgustaWestland FDI in Indian joint venture
Amid a raging row over alleged kickbacks in the AgustaWestland chopper deal, the Foreign Investment Promotion Board (FIPB) has deferred a decision on increase in FDI in the Italian firm’s joint venture with Tata Sons.business Updated: May 03, 2016 06:59 IST
Amid a raging row over alleged kickbacks in the AgustaWestland chopper deal, the Foreign Investment Promotion Board (FIPB) has deferred a decision on increase in FDI in the Italian firm’s joint venture with Tata Sons.
Indian Rotorcraft, a joint venture of AgustaWestland (a Finmeccanica company) and Tata Sons for setting up an assembly line for the AW119Ke helicopter, had sought post-facto approval of the FIPB for increased FDI inflow of Rs 19.64 crore as against Rs 17.6 crore approved in September 2011.
Besides the increased FDI inflow, it had also sought approval for “change of the foreign investor from AgustaWestland SpA, Italy to Finmeccanica SpA by way of merger of AgustaWestland SpA, Italy into Finmeccanica SpA.”
Decision on proposal for Indian Rotorcraft has been “deferred,” said the finance ministry in a statement. It gave no reason for deferring the proposal.
The FIPB meeting was held on April 8. Tatas have previously said Indian Rotorcraft has “no connection whatsoever with AgustaWestland’s (AW) supply of AW101 military helicopters to the government of India.”
It is alleged that bribe was paid for securing the contract for supply of 12 AW101 military helicopters during the previous UPA regime.
“Indian Rotorcraft’s (IRL) business proposition is to assemble AW119ke helicopters, at a facility in Hyderabad, for exports to AW for it to sell them to its customers. IRL’s business remit does not include any selling activity for defence related entities,” Tata Sons said on its website.
Tata Sons and Italian defence major AgustaWestland had in February 2010 signed an agreement for formation of a joint venture company to establish a final assembly line for AW-119 helicopters for the Indian Army and the global market.
The finance ministry release further said the FIPB headed by economic affairs secretary Shaktikanta Das cleared seven FDI proposals worth Rs 517.57 crore, including FDI proposal of pharma company Helix lnvestment Holdings Pvt Ltd.