New Delhi: A contract of 556-million-euro with Anglo-Italian firm Agusta Westland to buy VIPs helicopters has been cancelled by India due to corruption scandal on Wednesday.
Defence Minister AK Antony held a meeting with Prime Minister Manmohan Singh after which this deal has been scrapped. India had suspended the deal in 2013 after Italian investigators began looking into allegations that Agusta Westland paid bribes to win the contract.
Notify that the head of parent company of Agusta Westland, Finmeccanica was arrested in February over the case- touching off a firestorm in India, where the Congress-led government has been battling a string of graft scandals before elections of 2014 general election.
India had signed the deal in 2010 for 12 helicopters from Agusta Westland after the company beat competition from America and Russian rivals. In November last year the helicopter maker had sought arbitration to try to salvage the contract.
According to Italian media report, Italian prosecutors suspect kickbacks worth around 10 percent of the deal — $67.6 million (50 million euros) — were paid to Indian officials to swing the deal in favor of Agusta Westland.
Meanwhile, India has already received three of the helicopters, intended to be used by such dignitaries as the prime minister and the president, but Antony halted deliveries of the remaining nine.
The defence ministry “deviated from procurement procedure and tender on several instances in the deal” including altitude requirements, said auditor general of India in his report.
Indian detectives raided the home of former air force chief S.P. Tyagi as part of the probe into the allegations of bribery. Tyagi has denied any wrongdoing. Cash was allegedly handed to Tyagi’s cousin, with more money funneled via a web of middlemen and companies in London, Switzerland, Tunisia and Mauritius. The purchase also came under scrutiny from Italian investigators probing allegations the Italian group had broken the law by bribing foreign officials.
However, the company denies any wrong doing. . Orsi denies any wrongdoing and his lawyer have called the allegations against him “inconsistent” and his arrest “unjustified”. It is expected that the cancellation of this deal give a hard hit to Agusta Westland.
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