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Chopper scam: Government issues show cause notice

Posted on Feb 15, 07:50PM | IBNS

New Delhi, Feb 15 : The government on Friday issued show cause notice to the AgustaWestland of UK, a subsidiary of Italian defence giant Finmeccanica, on bribery charges in the Rs.4000-crore VVIP chopper deal.

The government has initiated action for cancellation of contract and the Integrity pact for procurement of 12 AW101 helicopters for the use of VVIPs.

"The Ministry of Defence (MoD) has initiated action for cancellation of contract for procurement of 12 AW101 helicopters for the use of VVIPs," Ministry of Defence said in a statement.

"MoD today issued a formal show cause notice to the AgustaWestland of UK seeking cancellation of contract and taking other actions as per the terms of the contract and the Integrity Pact," the ministry said.

Besides bribing Indian officials for a 12-helicopter deal, Finmeccanica discussed kickbacks for a larger deal with a serving Brigadier in the Indian Army, Italian prosecutors had said.

The government has provided the company with a term of seven days to come clear on why the deal should not be cancelled.

"MoD had already put on hold further payments to the company on Wednesday. With today's show cause notice, the operation of the contract has been put on hold. The company has been asked to reply to the notice in seven days," it said.

The issue is all set to be debated upon in the upcoming session of Parliament.

Union Parliamentary Affairs Minister Kamal Nath told NDTV on Friday that the government is ready to discuss the helicopter deal in Parliament and can go for even a Joint Parliamentary Committee (JPC) probe into the allegations of corruption.

The report by the investigators said that an alleged middleman for helicopter manufacturer AgustaWestland, a subsidiary of Finmeccanica, touched the feet of former Air Force chief SP Tyagi.

The scandal scandal involved kickbacks worth upto Rs 360 crores for the deal that was worth about Rs 4,000 crores and allegedly took place during the tenure of Tyagi who headed the air force from 2004 to 2007.

Tyagi has denied the allegations and has said that he met one of the alleged AgustaWestland middlemen just once contrary to the charges of "six or seven" meetings.

The middleman Ralph Haschke has "confessed" that he met Tyagi six or seven times and once greeted him by touching his feet as a sign of respect, the Italian prosecutors have said.

The Italian inquiry has also found that in 2003, a serving Brigadier of the Indian Army allegedly demanded $5 million dollars to influence a contract for 197 light helicopters in favour of AgustaWestland.

The Indian government has already ordered a Central Bureau of Investigation (CBI) probe into the AugustaWestland deal for 12 VVIP choppers.

Italian police arrested Chief Executive Officer (CEO) of state-controlled Italian defence and aerospace giant Finmeccanica Giuseppe Orsi in Rome for alleged bribes paid in order to secure the deal.