India gives AgustaWestland final notice: govt official

NEW DELHI Wed Oct 23, 2013 5:57pm IST

Visitors look at AgustaWestland model helicopters during Heli-Asia exhibition in Kuala Lumpur October 22, 2002. REUTERS/Zainal Abd Halim/Files

Visitors look at AgustaWestland model helicopters during Heli-Asia exhibition in Kuala Lumpur October 22, 2002.

Credit: Reuters/Zainal Abd Halim/Files

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NEW DELHI (Reuters) - The defence ministry has issued a final "show cause" notice to AgustaWestland seeking to cancel a deal to buy a dozen helicopters and has given the company 21 days to reply, a government official said on Wednesday.

The official said the company, a subsidiary of Finmeccania (SIFI.MI), has been asked to explain why action should not be taken against it for violating the terms of the pre-contract integrity pact.

Earlier this month, AgustaWestland has invoked arbitration over the scandal-tainted deal.

In February, India froze payments on the 560 million euro contract after the deal became mired in allegations of bribery and the then-CEO of Finmeccanica was arrested by Italian police for allegedly paying bribes to secure the deal.

AgustaWestland denies the allegations.

A spokesman for Finmeccanica, which controls AgustaWestland, declined to comment.

(Reporting by Nigam Prusty; Writing by Sanjeev Miglani; editing by Malini Menon)

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