India defers purchase of 197 choppers over bribery claim

NEW DELHI Tue Apr 2, 2013 10:15pm IST

1 of 2. Central Bureau of Investigation (CBI) officials walk out of a building while carrying a bag of documents after conducting a raid as part of probes into the AgustaWestland bribery case in New Delhi March 13, 2013.

Credit: Reuters/Mansi Thapliyal/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - India on Tuesday deferred a decision on a deal to buy 197 light-utility helicopters pending completion of an investigation into kickback allegations, the latest setback to efforts to upgrade the country's ageing arsenal.

A previous tender to buy 197 helicopters for the army for $550 million collapsed in 2007 after claims of irregularities in the field trials.

Defence deals have drawn heavy scrutiny in recent weeks after Italian police arrested the head of defence group Finmeccanica(SIFI.MI) over allegations that subsidiary AgustaWestland paid bribes to win a $750 million deal to supply 12 luxury helicopters for political VIPs.

While looking into the Finmeccanica deal, Italian investigators said, they found papers suggesting a serving Indian army brigadier offered to help AgustaWestland win the contract for the 197 helicopter in return for a $5 million bribe. It is not clear if bribes were indeed paid.

"The 197 helicopters did not come up for discussions today because the army would like to see that there is an enquiry into some of the allegations made against one of its officers," Sitanshu Kar, a defence ministry spokesman, told reporters.

AgustaWestland did not make the short list in the tender. Eurocopter, a unit of aerospace and defence company EADSEAD.PA, and Russian Kamov are competing for the deal.

India plans to spend $100 billion upgrading its creaking military hardware over the next decade to match its growing economic clout and keep up with neighbours China and Pakistan as they modernize their own defence capacities.

India has emerged as the world's top arms importer, but deal after deal has been held up by graft claims and a tortuous procurement process.

The acquisition of the light reconnaissance helicopters has a troubled history. The government scrapped an earlier tender process, widely expected to go to Eurocopter's Fennec in 2007, because of allegations of unfair field trials.

India is considering whether to blacklist AgustaWestland over the VIP deal. It placed six defence companies on a blacklist last year because of corruption allegations.

These included Rheinmetall Air Defence, part of Germany's Rheinmetall AG(RHMG.DE), Israel Military Industries and Singapore Technologies Kinetics, which have been barred from doing business in India for 10 years.

(Reporting by Anurag Kotoky, writing by Manoj Kumar; Editing by Frank Jack Daniel and Mark Heinrich)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Diplomacy

REUTERS SHOWCASE

Maruti Results

Maruti Results

Maruti Suzuki says profits helped by sentiment, not growth.  Full Article 

Tracking the Monsoon

Tracking the Monsoon

Monsoon turns patchy after revival.  Full Article 

ICICI Profit Up

ICICI Profit Up

ICICI Bank Q1 net profit up 17 percent, beats estimates.  Full Article 

Pharma Sector

Pharma Sector

FDA raises concern over drug production process at Cadila  Full Article 

Coal India

Coal India

Some Coal India mines may be run by foreign firms - minister  Full Article 

Fuel Prices

Fuel Prices

IOC to cut petrol prices by 1.5 pct from Friday  Read 

Economic Pulse

Economic Pulse

India's infrastructure output growth hits 9-month high in June  Full Article | Related Story 

Joint Bid

Joint Bid

ONGC, Oil India bid $1.5 bln for stake in Murphy Oil's Malaysia assets - sources  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage