Finmeccanica knew of bribe, says former executive

Senior Finmeccanica executives knew they were violating Indian law by trying to influence through bribes the Rs. 3,760-crore VVIP chopper deal, a former company functionary who held a senior position has told Italian prosecutors. Charu Sudan Kasturi reports.

Senior Finmeccanica executives knew they were violating Indian law by trying to influence the Rs. 3,760 cr VVIP chopper deal using bribes, a former company official has told Italian prosecutors, drilling holes in the arms giant's claims that it stuck to the rulebook.

"Yes, because there was the danger that if it (the bribery) came to India's knowledge, it could blacklist us," Finmeccanica's former chief of international relations Lorenzo Borgogni has told prosecutors in fresh probe documents submitted to an Italian court, when asked why the company used middlemen to win the deal.

Faced with the prospect of losing the massive chopper deal, to supply 12 VVIP helicopters to the Indian Air Force, and of a pariah status in the Indian defence fraternity that could rob the firm of Rs. 44,000 cr worth deals, Finmeccanica has strongly denied any wrongdoing.

AgustaWestland, the British subsidiary of Finmeccanmica and the manufacturer of the shoppers, is accused of funnelling Rs. 360 cr of bribe money to India to pay off middlemen and former air chief SP Tyagi's family to change specifications for the contract to allow the company to win.

Responding to a show cause notice from the defence ministry, as a precursor to the possible cancellation of the chopper deal, the Italian firm has said that it followed the law and that the allegations against it were based on media reports.

Finmeccanica has also asked the government to continue with the chopper deal and to not stop payments it is due.

But Borgogni's statements contrast starkly with the company's version in its response to the Indian government.

Asked again by prosecutors to confirm that it was AgustaWestland that paid the bribes, and that the firm's top executives were aware that India could cancel the chopper contract and blacklist the firm if the bribery was caught, Borgogni replied to both questions with a straight: "Yes."

As reported first by HT on February 15, intercepted conversations between key middlemen Guido Ralph Hashckhe and Carlo Gerosa reveal that they laughed off the risks involved in what they were attempting, playacting how they would answer a judge, and joking about spending the millions they earned as commissions on ballerinas and champagne.