India launches second graft probe into AgustaWestland

NEW DELHI Sat Jun 15, 2013 5:50pm IST

Workers clean an AgustaWestland helicopter AW169 in static display, two days before the opening of the 50th Paris Air Show, at the Le Bourget airport near Paris, June 15, 2013. REUTERS/Pascal Rossignol

Workers clean an AgustaWestland helicopter AW169 in static display, two days before the opening of the 50th Paris Air Show, at the Le Bourget airport near Paris, June 15, 2013.

Credit: Reuters/Pascal Rossignol

Related Topics

Stocks

   

NEW DELHI (Reuters) - Investigators have launched a second corruption probe into defence firm AgustaWestland in connection with a deal to sell 197 army helicopters, authorities said on Saturday, potentially dealing another blow to a company that India might blacklist.

New Delhi is already investigating the firm, a division of Italian defence group Finmeccanica (SIFI.MI), for bribes allegedly paid to Indian officials in a separate 560 million euro helicopter deal.

AgustaWestland has denied any wrongdoing and has tried to prod the Indian government to pay for three helicopters it has already delivered as part of the deal, after the government froze payments in February.

"CBI has registered a preliminary inquiry," said a spokesperson for the Central Bureau of Investigation (CBI), an agency like the FBI in the United States. The spokesperson, who spoke on condition of anonymity, also told Reuters the inquiry was being carried out following a request from India's defence ministry.

Finmeccanica declined to comment. A spokesman for AgustaWestland said the company had received no communication from Indian authorities concerning the probe.

A source in the Indian defence ministry said that the latest case is in connection with allegations that a brigadier in the Indian army offered to swing the deal for the sale of 197 helicopters for a bribe of $5 million.

Those allegations first surfaced in documents sent by Italian investigators to their Indian counterparts, the source said. The deal has been suspended without being awarded to any company.

AgustaWestland expressed surprise at press reports of an inquiry given the tender was suspended and the company had not made the shortlist for the deal.

Defence Minister A.K. Antony may blacklist AgustaWestland from doing business in the country, a decision that could help the government clean up its image after a series of corruption scandals spanning defence to telecommunications.

Antony, who has a corruption-free image that sets him apart from many politicians, is believed to favour blacklisting the firm. But he could be outvoted by cabinet colleagues who fret it could hamper defence purchases in the future, several government sources have said.

Finmeccanica said in May that it did not expect India to blacklist either the group or AgustaWestland for the time being.

Indian defence deals have been hit by a series of corruption allegations that have plagued sales agreements and hobbled efforts to beef up the armed forces, especially against perceived threats from neighbours China and Pakistan.

India is the world's largest arms importer and has targeted a $100 billion splurge on defence spending over 10 years.

(Writing by Matthias Williams; additional reporting by Lisa Jucca in Milan; Editing by Ron Popeski)

FILED UNDER:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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