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India cancels deal with AgustaWestland

New Delhi, Jan 1 : The Indian government on Wednesday cancelled the Rs. 3600 crore VVIP chopper deal with Anglo-Italian firm AgustaWestland owned by Italy's Finmeccanica in view of bribery allegations.


"The Government of India has terminated with immediate effect the Agreement that was signed with M/s. AgustaWestLand International Ltd. (AWIL) on Feb 8, 2010 for the supply of 12 VVIP/VIP helicopters on grounds of breach of the Pre-contract Integrity Pact (PCIP) and the Agreement by AWIL," the Defence Ministry said in statement.

"Based on the opinion received earlier from the Attorney General of India, it has been the view of the government that integrity-related issues are not subject to arbitration. However, AWIL has since pressed for arbitration and appointed an arbitrator from its side. In view of this, MoD sought afresh the opinion of the Attorney General. With a view to safeguard the interests of the Government, MoD has nominated Justice BP Jeevan Reddy as its arbitrator," the statement said.

The company was roped in to supply 12 helicopters for VVIPs and out of these AgustaWestland has already delivered three.

AgustaWestland had been accused of bribery charges in the Rs. 3600-crore VVIP chopper deal with Indian defence department.

The company had denied all charges of paying kickbacks.

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

The report by the investigators had said that an alleged middleman for helicopter manufacturer AgustaWestland was seen touching the feet of former Air Force chief SP Tyagi.

The scandal involved kickbacks worth upto Rs 360 crores for the deal that was worth about Rs 3600 crores and allegedly took place during the tenure of Tyagi who headed the air force from 2004 to 2007.

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

The middleman Haschke "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 had said.

Tyagi's family members were also linked to the scam but his brother vehemently denied it.

Italian police earlier 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.

--IBNS (Posted on 01-01-2014)

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