Italian Prime Minister Mario Monti on Tuesday said his government was prepared to do "whatever necessary to clean up" industrial group Finmeccanica after the arrest of its CEO in an investigation related to the sale of 12 helicopters to India.
"There is a problem with the governance of Finmeccanica at the moment and we will face up to it," Monti told Italian television.
His statement comes after Italian police arrested company chairman and chief executive Giuseppe Orsi for questioning in Milan.
The government owns 30% stake in the country's second-largest industrial group after Fiat.
Orsi is suspected of being involved in payment of bribes in the sale of 12 helicopters produced by Finmeccanica's subsidiary AgustaWestland to the Indian government in 2010.
The current CEO of Finmeccanica headed AugustaWestland at the time the deal was made.
Italian news agency Ansa reports that prosecutors suspect around 50 million euros (Rs 362 crore approximately), about 10 per cent of the deal were ploughed back into kickbacks to ensure AgustaWestland won the contract.
Orsi has been under investigation for bribery and embezzlement for several months and has denied any wrongdoing.