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Finmeccanica denies wrongdoing by AgustaWestland in chopper deal with India

File pic of an AW-101 helicopter. Image Courtesy: AgustaWestland
File pic of an AW-101 helicopter. Image Courtesy: AgustaWestland

Italian aerospace and defence major Finmeccanica has denied any wrongdoing by its subsidiary AgustaWestland while securing the February 2010 contract to supply 12 AW101 helicopters to India.

India had signed the $750 million contract for the helicopters to ferry VVIPs, but the deal has been mired in controversy after allegations that bribes had been paid by AgustaWestland to bag the deal.
 
On February 15, the Government of India initiated action by issuing a formal show cause notice to AgustaWestland seeking cancellation of the contract and taking other actions as per the terms of the contract and the Integrity Pact.
 
"Following recent reports concerning the alleged involvement of AgustaWestland, a Finmeccanica Group company, in irregularities relating to a contract for the supply of helicopters to the Indian government, Finmeccanica highlights that it has acted correctly throughout the 40 years it has operated in India, one of the most strategically important markets for the entire Group," a statement from the Italian company said.
 
"In addition, Finmeccanica underlines that its companies have operated for many years and continue to operate in India, with managerial and operational autonomy, complying fully with Indian Law and the ethics principles of the Group. 
 
"Finmeccanica is confident that AgustaWestland will demonstrate that it has fully complied with Indian law and the above mentioned ethics principles. 
 
"Finmeccanica is ready to cooperate with the Indian authorities in order to clarify the matter and will collaborate in accordance with international procedures applicable to an investigation of this kind," the statement added.
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India's Ministry of Defence has already put on hold further payments to the company. With the show cause notice of February 15, the operation of the contract has been put on hold. The company had been asked to reply to the notice within seven days.
 
AgustaWestland (UK), an Anglo-Italian firm, is a subsidiary of Finmeccanica, whose chief executive Gieuseppe Orsi was arrested on February 12 by Italian authorities investigating the allegations.
 
India had decided to acquire the 12 three-engine AW101 helicopters for the Indian Air Force' (IAF) Communication Squadron, which ferries the President, the Prime Minister and other VVIPs.
 
The Italian authorities began investigating the deal after reports in the media alleged that bribes were paid in India to secure the contract.
 
Soon after news of Mr Orsi's arrest was received in India on February 12, the Government had ordered the Central Bureau of Investigation (CBI) to probe the deal.
 
The MoD had said earlier this month that it was determined to take all possible legal and administrative action against anyone found guilty of receiving bribes in the deal.
 
In a long and detailed fact-sheet on the entire case, the MoD also said that the CEO of AgustaWestland had been asked to categorically state the clear position in view of the latest allegations, indicating specifically if any financial transaction had taken place with any Indian individual or entity which would be violative of the Integrity Pact or any other terms and conditions of the contract.
 
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The statement made it clear that both the contract and the Integrity Pact signed with AgustaWestland contained specific provisions by which strict action, including cancellation of contract, recovery of payment, blacklisting and penal action, could be taken against the vendors.
 
The MOD said the procurement of the helicopters was progressed in accordance with the established procedure in a transparent manner with all stages of procurement being followed meticulously.
 
Apart from a CBI team, the MoD has deputed one of its own officers, a senior Joint Secretary, to Italy to gather as much evidence as possible relating to the allegations of corruption in the acquisition of the helicopters.
 
Earlier this week, Prime Minister Manmohan Singh had raised the issue with visiting British Prime Minister David Cameron, seking full assistance from the United Kingdom in the investigations into the allegations of bribery by AgustaWestland.
 
At talks with Mr Cameron here on February 19, Dr Singh conveyed to him India's "very serious concerns" regarding the allegations about unethical means used in securing the contract.
 
"I told him that we have sought an explanation from the company by February 22 to examine if the contractual provisions on unethical practices and the Integrity Pact have been violated. I have sought full assistance from the U.K.," he had said later at a joint media interaction with Mr Cameron.
 
Dr Singh said Mr Cameron had assured him of the cooperation of his Government in the investigations.
 
Mr Cameron said, on AgustaWestland, Britain would respond to any request for information.
 
"I am glad that the Italian authorities are looking into this issue in detail as Finmeccanica, the parent company of AgustaWestland, is an Italian company. Let me make absolutely clear that in Britain we have introduced anti-bribery legislation that is probably the strongest anywhere in the world, and we will root out any problems of bribery or corruption wherever they appear and whenever they appear," he had said.
  
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