File
picture shows a new AgustaWestland AW159 Wildcat helicopter at the
Farnborough
International Airshow in Hampshire, southern England, on
July 11, 2012
(AFP/File, Adrian Dennis)
|
New Delhi —
India has cancelled a 556-million-euro ($753 million) contract with
Anglo-Italian firm AgustaWestland to buy luxury helicopters for VIPs following
a corruption scandal, the Press Trust of India reported Wednesday.
The deal
was scrapped after Defence Minister A. K. Antony held a meeting with Prime
Minister Manmohan Singh, the national news agency said, quoting what it
described as official defence ministry sources.
India had
suspended the deal in 2013 after Italian investigators began looking into
allegations that AgustaWestland paid bribes to win the contract.
The Italian
boss of AgustaWestland's parent company Finmeccanica was arrested last 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 this
year.
India
signed the deal in 2010 for 12 helicopters from AgustaWestland after the
company beat competition from American and Russian rivals.
In November
last year the helicopter maker had sought arbitration to try to salvage the
contract.
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 favour of AgustaWestland, according to Italian media reports.
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.
India's
auditor general said in a report last year that the defence ministry
"deviated from procurement procedure and tender on several instances in
the deal" including altitude requirements.
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 funnelled 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.
The company
denies any wrongdoing.
A spokesman
for the company in India was not immediately available to comment on the PTI
report.
The
cancellation is expected to be a big blow to AgustaWestland, which has a
factory in southwest England.
The
decision will also be a severe blow to Finmeccanica, whose chief executive
Giuseppe Orsi resigned from behind prison bars in February last year.
Orsi denies
any wrongdoing and his lawyer has called the allegations against him
"inconsistent" and his arrest "unjustified".
The latest
move by the Indian defence ministry is seen as a government attempt to contain
the fallout from the corruption scandal before elections due in the first half
of this year.
The
helicopter deal was cleared by Singh, whose Congress-led government has been
buffeted by a series of corruption scandals that analysts say could affect the
party's electoral chances in 2014 polls.
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