Millennium Post

India warns Italian firm of blacklisting, legal action

With the VVIP choppers deal facing charges of kickbacks, government on Thursday formally asked Italian firm   amidst its warning of legal action including blacklisting of the firm.

The Ministry of Defence, which is under attack on the issue, came out with a fact-sheet detailing the sequence of the Rs 3,600 (rpt) Rs 3,600 crore deal for 12 helicopters clinched in 2010 by a Finmeccanica subsidiary AgustaWestland.

It notes that the mandatory technical requirements of the chopper were changed in the tender during the Vajpayee government in 2003, with the then National Security Adviser Brajesh Mishra playing a key role.

The CEO of AgustaWestland has been asked to ‘categorically state the clear position in view of the current developments indicating specifically if any financial transaction has taken place with any Indian individual/entity which would be violative of the Integrity Pact or any other terms and conditions of the contract’, it said.

Noting that the contract with AgustaWestland carried an integrity pact that bars paying of bribes or involvement of middlemen, the Ministry warned of ‘strict action including cancellation of contract, recovery of payment, blacklisting and penal action can be taken against the vendors.’

It said the Government is ‘determined to take all possible legal and administrative action against the guilty parties and accordingly has ordered a thorough probe by CBI.’

Giving details, the fact-sheet said that the first Request for Proposal was issued in March 2002 mandating requirement of 6,000 metre (18,000 feet) flying altitude for selection of the chopper.

This requirement made it clear that AgustaWestland could not participate in the deal.


Information and Broadcasting Minister Manish Tewari Thursday slammed the BJP for comparing the VVIP chopper deal with the Bofors scam, and said the government has not been hesitant in taking action.

‘The chopper deal process was initiated during the NDA government and culminated under the UPA government. Certain issues have come out about the deal. The government has addressed them by ordering a CBI inquiry,’ Tewari told journalists at the Indian Women’s Press Corps. ‘There has been no foot dragging on the issue,’ he said

The minister also slammed the BJP for comparing the deal with the Bofors scam. ‘It’s extremely dangerous to draw parallel to some other investigation. In February 2004, the court quashed Bofors charges (but) the BJP-led government at that time did not even file a petition challenging it. Rather than being sensational, let the investigation play it out,’ he said. BJP leader Ravishankar Prasad Wednesday said the chopper deal was a ‘Bofors in making’

The defence ministry has ordered a CBI probe into the $750 million deal for 12 VVIP AgustaWestland helicopters, following the arrest in Italy of its manufacturer Finmeccanica’s chief on charges of graft in the contract. In the Bofors scam that broke out in the late 1980s, several Congress leaders were accused of receiving kickbacks from Swedish firm.


Italy's state-controlled AgustaWestland had allegedly kept aside Rs 217 crore as part of ‘corrupt activity’ to bag India's Rs 3,600 crore deal and its choppers became eligible only after certain required parameters were altered in the tender document.

According to the report filed by Italian investigators in an Italian court, the middlemen had agreed for a 7.5 per cent commission in the Rs 3600 crore for 12 VVIP helicopters.

Finally, the kickbacks were to the tune of about Rs 362 crore. The payment of bribes through contracts between firms registered in Tunisia and India, was ‘still underway’ when the scam was unearthed.

The report said CEO of Finmeccanica Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini had paid 30 million Euros (Rs 217 crore) to one of the main middlemen Christian Michel. ‘Orsi and Spagnolin, moreover, paid Micheal Christian a total amount of about Euros 30 million, partly destined to support the corruptive activity meant to bag the order and partly to implement the contract,’ the document said.The arrested CEOs of the two companies had also ‘paid Guido Ralph Hashcke and Carlo Gerosa (two other alleged middlemen), through a consultancy contract between AW spa and Gordian Services Sarl an amount of 400,000 Euros (about Rs 2.8 crore), of which 100,000 Euros (Rs 72 lakh) were paid cash to the Tyagi brothers (Julie, Docsa and Sandeep.’

The report suggests that the middlemen had close contacts with the family of former IAF Chief Air Chief marshal S P Tyagi, particularly his three cousins.One middlemen named 'ADR' has claimed in his interrogation that the first meeting of one of the middlemen Zappa with Tyagi happened at the time when the tender was in the Request for Information phase.  Already in the Zappa-ACM Tyagi meeting, one of the topics was the one of the 18,000 feet altitude, which was practically excluding all the competitors, except for the French ones, Eurocopter which anyway did not have a VIP model,’ ADR said as per the report.
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