17 March 2013
New Delhi: In the VVIP chopper deal, defence minister A.K. Antony had initially raised questions over IAF’s plans to hold the field evaluation trials of the Anglo-Italian AW-101 and American Sikorsky S-92 choppers in their home bases and not in Indian conditions, the Press Trust of India has said.
“The Defence Procurement Board (DPB) had also asked the IAF to review its decision in this regard and test the two choppers in Indian conditions,” the report further said. “The air headquarters, however, told the defence ministry that the choppers were available for trials at the home bases of the vendors and bringing them to India would result in a delay of at least nine months in their procurement,” the report added.
“It was only after the IAF put across the argument about the delay in procurement process, the minister and the DPB gave a go-ahead for the trials to be conducted outside India,” PTI said citing defence ministry sources.
The Central Bureau of Investigation (CBI) has issued look-out notices for former Indian Air Force (IAF) chief S.P. Tyagi, his three cousins and five other Indians who have been named in its FIR in the alleged kickbacks received by them in Rs3,600 crore VVIP chopper deal, the Press Trust of India has reported.
“CBI sources said a look-out notice has been issued to prevent them from leaving the country from any airport,” the agency said. “Air Chief Marshal (retd) S.P. Tyagi this Wednesday became the first Air Chief to be booked by the Central Bureau of Investigation (CBI), along with 12 others, for alleged cheating, corruption and criminal conspiracy in the deal and searches were carried out at 14 locations including his residence,” the report further said.
The Central Bureau of Investigation (CBI) has questioned “the industrialist-brother of former union minister Santosh Bagrodia’s Satish Bagrodia who is the chairman of IDS Infotech, one of the suspect companies in the alleged bribery scandal”, the PTI said in a report.
“They (CBI officials) said Satish Bagrodia was questioned about alleged channelling of the bribe money through his company by Italian middlemen. The sources claimed the industrialist refuted the allegations and said he did not interfere in the day-to-day working of the company which is handled by other senior executives and board members,” the report added.
8 March 2013
New Delhi: “The Central Bureau of Investigation (CBI) is all set to name former Air Chief S.P. Tyagi and 10 others in a regular complaint (RC), the agency’s version of a first information report (FIR), as the next major step in its probe of the AgustaWestland deal,” a report in India Today has said.
“Besides Tyagi, the agency’s RC is likely to name his cousins Sanjeev aka Julie Tyagi, Docsa Tyagi, Sandeep Tyagi, Gautam Khaitan (who was formerly associated with Aeromatrix Info Solutions Pvt. Ltd) and Praveen Bakshi. Others likely to be named include Giuseppe Orsi, former CEO of Italian defence major Finmeccanica; Bruno Spagnolini, CEO of AgustaWestland, a Britain-based subsidiary of Finmeccanica; and alleged middlemen Guido Ralph Haschke, Carlo Gerosa and Christian Michel,” the report added.
“The firms named are Finmeccanica, AgustaWestland, IDS Infotech Ltd (India) and Aeromatrix Info Solutions Pvt. Ltd (India),” it said.
7 March 2013
New Delhi: India’s defence ministry has now asked AgustaWestland to explain within one week its linkages with software companies allegedly used as a cover for paying kickbacks in the VVIP chopper deal, the Press Trust of India (PTI) said in a news report.
“In a fresh communication to the Anglo-Italian firm after rejecting its reply to the show-cause notice, the defence ministry has asked AgustaWestkand to provide specific details about its transactions with Tunisia and India-based firms IDS Infotech and Aeromatrix,” the report added.
“Gautam Khaitan, former board member of Aeromatrix, one of the companies named in the VVIP helicopter bribery scandal, was on Thursday quizzed by CBI on his alleged links with Italian middlemen,” another PTI report said.
“During quizzing, Khaitan denied having any links with Gerosa and Haschkhe and claimed that he was a board member of the company being their lawyer but resigned after controversy about the helicopter deal surfaced, the sources claimed,” the report added.
A report by CNN-IBN news channel has said that more names could figure in the helicopter deal.
“According to CNN-IBN,investigators have said they have documents to prove that payments were made in the AgustaWestland chopper deal, adding that more names would surface soon,” Firstpost.com has said in a report.
“The investigating agency which filed its preliminary report into the scam had named Air Chief Marshall (retired) S.P. Tyagi, as well as his cousins Julie Tyagi and Dosca Tyagi, as having received kickbacks from AgustaWestland to ensure that they received a lucrative defence deal to manufacture choppers,” the report further noted.
6 March 2013
New Delhi: The Central Bureau of Investigation (CBI) on Wednesday questioned former Indian Air Force chief S.P. Tyagi and his three cousins in connection with the controversial helicopter deal, Mint reported on Wednesday.
The agency had last month registered a preliminary enquiry against the four, the chief executive officers of Finmeccanica and AgustaWestland, three middlemen, two Indian companies and their executives, the report added.
“Sources said Tyagi was brought face-to-face with his cousins after the agency apparently found contradictions in their versions about their link to the deal. The three brothers initially denied their interest in the procurement of the choppers, the sources claimed. However, they are said to have accepted meeting Haschke on several occasions for another business interest,” a related report in The Indian Express newspaper said.
The Enforcement Directorate has now begun probing the controversial chopper deal, a report by NDTV news channel has said.
“The Enforcement Directorate (ED), which is probing arms dealer Abhishek Verma, has begun a probe into allegations of pay-offs in the Rs3,400 crore VVIP chopper scam,” the report said.
“The investigating agency will be looking into the accounts of IDS Infotech and Aeromatrix, the two Chandigarh-based companies that Italian prosecutors claim were allegedly used along with their directors and senior executives to route bribes to India along with other firms in the UK, Mauritius and Tunisia. Middlemen Carlo Gerosa and Guido Haschke were directors of Aeromatrix at the time the deal was signed in 2010,” the report further said.
Contrary to AgustaWestland’s claims that no middlemen were involved in the controversial chopper deal, the firm may actually have signed three different contracts, The Indian Express has said in a report.
“One of the three contracts was an agreement to pay 5 per cent of the worth of the deal to Mohali-based IDS Infotech and another to manage “hostile” media,” the report has said.
“The contracts, copies of which are with The Indian Express, are backed by detailed bank statements that show that millions of euros were paid to alleged middlemen Christian Michel and Guido Haschke for the deal, through banks in Dubai, Italy and Switzerland. Italian investigators have referred to these contracts, among others, to allege that kickbacks worth at least 10% of the Rs.3,546 crore deal were paid,” the report goes on to add.
Meanwhile, a brigadier, whose name figured in the allegations of kickbacks in the chopper deal, has been asked by the government about the charges, which he has denied, a report by the Press Trust of India has said.
“He allegations were levelled against the brigadier for seeking $5 million from AgustaWestland during an ongoing probe in Italy into the alleged involvement of Finmeccanica in paying kickbacks to secure the deal for 12 VVIP choppers,” the report said.
“The deal in question in the brigadier’s case is for procuring 197 light utility choppers for the army and the IAF. The brigadier was officially asked to explain his stand on the allegations levelled against him and he has denied any involvement in the alleged scandal,” the report goes on to add.
The government is carrying out a detailed assessment of Indian companies that are to carry out offset contracts for AgustaWestland, a report in Times of India has said.
“The review of the offset partners of AgustaWestland was started after it emerged that IDS Infotech, the Chandigarh-based software company named as one of the recipients of kickbacks in the Italian court documents, also figure among firms listed in 2010 as offset partners of the UK-based helicopter manufacturer.” the report said.
“Sources said IDS Infotech wrote to the ministry of defence (MoD) a few months ago saying that it wants to be excused from the offset obligations in the contract. It is not clear if IDS Infotech sought to pull out because its outsourcing work with AgustaWestland had been taken out by Guido Haschke, one of the alleged middlemen in the deal. Haschke took out the alleged phony software contract, which according to Italian court documents was a decoy to transfer millions of dollars to India, and created a new company, Aeromatrix, also based in Chandigarh. Both IDS Infotech and Aeromatrix figure among the suspects in the CBI’s preliminary enquiry (PE),” the report goes on to add.
27 February 2013
New Delhi: The controversial AgustaWestland chopper deal will be debated in the Rajya Sabha today after the government agreed to discuss the issue following demand by the BJP on Tuesday, a Press Trust of India report has said.
“Leader of Opposition Arun Jaitley said the government should agree to a debate on a particular day after which Mr Shukla said the defence minister wanted some more time as more details on the issue were awaited and suggested a discussion by next week. As BJP members including Venkaiah Naidu, Najma Heptulla and Ravi Shankar Prasad disagreed and were up on their feet demanding immediate discussion on the chopper deal and defence minister A.K. Antony’s response on it, Mr Shukla said a debate on farmers problems was slated for today on Mr Naidu’s demand and if he agreed to change it government can discuss the chopper deal on Wednesday,” the report added.
“It was the Italian police which rescued CBI, by providing copies of warrants it used for arrests and searches, after the Indian team failed to secure any documents from the prosecutors and court in Italy on the AgustaWestland bribery case,” a report published by The Economic Times has said.
“The documents provided by Italian police helped CBI to lodge a Preliminary Enquiry (PE) in the case. A senior CBI official said on Tuesday that its team managed to get “authenticated copies of the search and arrest warrants” used by the Italian police while arresting former Finmeccanica chairman Giuseppe Orsi and Swiss middlemen Guido Haschke and Carlo Gerosa, earlier this month,” the report further added.
26 February 2013
New Delhi: “Christian Michel, the British middleman who got €30 million as kickback in the 2010 VVIP helicopter deal, had come up with an ingenious plan to conceal the cut money as a genuine business transaction between him and AgustaWestland,” a report in The Times of India has said, citing Italian court documents.
“Michel had drawn up a plan to buy obsolete helicopters from Pawan Hans at a throwaway price, and sell them at a premium to AgustaWestland. Under the cover of this deal, Michel was to receive 18 million euro as kickback,” the report adds.
A report in The Indian Express newspaper has said that “AgustaWestland has questioned the allegations of wrongdoing in the IAF’s controversial VVIP chopper deal and sought evidence to back the charges of graft that threaten to cancel the contract for 12 helicopters.”
“Pointing out that three helicopters have already been delivered, AgustaWestland has also said that it expects India to continue making payments for the remaining nine. The defence ministry has said that all future payments have been frozen due to the corruption allegations,” the report further notes.
25 February 2013
New Delhi: According to a report by NDTV news channel, AgustaWestland has, in a letter, objected to the deal being revoked by the Indian government.
“The letter, signed by Raymond Edwards, Managing Director of AW, states that the allegations of bribery are based on unsubstantiated news and other media reports, and that Italian investigations are at a “pre-trial phase” which means that charges have not been “tested in court.”,” the NDTV report says.
“AW in its letter to Ministry of Defence stresses that the deal for the helicopters, meant to be used by VVIPs like the Prime Minister, was finalized after a “meticulous” procedure by the Air Force and the government. The contract was signed in 2010 with the approval of the Cabinet Committee of Security which is headed by the Prime Minister. AgustaWestland has also written that Ministry of Defence has itself claimed that “procurement process was in accordance with established procurement process in a transparent manner.” It has also said that charges of bribery were at a “pre-trial stage” and the charges haven’t been “tested in court.” The suspension of the contract and payment is “not justified”,” the report further says.
Meanwhile, the CBI has registered a preliminary enquiry in the case, CNN-IBN news channel said in a report.
“A preliminary enquiry (PE) has been registered by the Central Bureau of Investigation (CBI) in the Rs. 3,600 crore AgustaWestland 101 helicopter deal. Sources say that former Indian Air Force Chief Air Chief Marshal (retd) SP Tyagi and his cousins Julie Tyagi and Dosca Tyagi have been named in the CBI PE,” the report said.
“But the CBI will have to clearly establish if the Tyagi brothers got 28 million Euro as mentioned in the Italian probe report of of the share went to someone else? Is there any proof of Tyagis involvement beyond Haschke’s alleged confessions? Are there other Indians who benefited from kickbacks? Will the CBI be able to reach key players like Christian Michel, Guido Haschke and Carlo Gerosa? named in the Italian probe report? Has the PE filed been a token response - simply done under pressure and can the money trail be established?,” the report further noted.
Citing internal documents of Finmeccanica, a report in The Times of India has said that Guido Haschke, the Swiss resident who was allegedly one of the key middlemen in the VVIPhelicopter deal with India, and his companies “were paid at least €2.65 million (approx Rs.18.55 crore) between 2005 and 2011 for several activities across several countries.”
“These are besides the payments that were made to companies such as IDS Infotech and Aeromatrix, and other front companies,” the report says.
“The documents point towards an extremely cozy relationship between the Italian-US citizen and the consortium. It also shows the blessings enjoyed by Haschke from the Finmeccanica top brass, especially former chairman Giuseppe Orsi, which emerges in the several taped conversations between Hashcke and other suspects during the ongoing Italian probe,” it goes on to say.
24 February 2013
New Delhi: The Central Bureau of Investigation (CBI), whose team is in Italy to investigate the controversial chopper deal, has received some documents from Italy, a news report by Times Now channel has said.
“Moving forward in its probe into alleged kickbacks in the VVIP helicopter deal, the CBI has procured some documents from Italian authorities in Milan that may help it investigating whether any Indian had received bribes to swing the deal in favour of AgustaWestland. Highly-placed sources in the probe agency said today that one of the members of the CBI team who returned this morning from Milan had got some of the documents from the Italian prosecutor regarding the controversial Rs3,600 crore deal which would be examined in the next couple of days,” the report said.
“The sources said a Preliminary Enquiry (PE) would be initiated in the next couple of days after examining the documents received from the Italian authorities. It has been alleged that kickbacks to the tune of Rs362 crore were allegedly paid to help secure the deal in favour of the Anglo-Italian firm. While declining to reveal the nature of documents, the sources said prima-facie it seemed sufficient to initiate a PE against unknown persons since Italian authorities could share only these papers at this stage. The authorities have, however, promised to hand over other documents once their probe is completed,” the report further added.
An opinion piece in Mail Today newspaper has said that decoding the case should be a “walk in the park” for the CBI.
“The Comando aka Italian Police seems to have done a wonderful job in tracking the AgustaWestland kickbacks. So, even as we make a big shebang over phone taps, that is the precise modus operandi used by the Carabinieri,” the piece notes.
“In many ways, the transcripts read like a Robert Ludlum thriller laying bare the whole ball of wax. Or should I say onion? Because the more you read the more the noxious fumes make your eyes water. I discussed several parts of the comprehensive report with the new CBI director Ranjit Sinha and his counter was that till they get the requisite information from official sources, they pretty much cannot act on it,” it further notes.
The Press Trust of India has reported that Finmeccanica has delayed publication of its 2012 results following the bribery probe and has increased the number of members in its surveillance body.
“The Board f Directors of the firm also decided to centralise the Group’s “Internal Audit activities, in order to exercise a more direct and incisive internal control over the correctness of the processes adopted by the Group companies,” the PTI report said.
“The Board, which met on Thursday, under the chairmanship of vice-chairman Admiral Guido Venturoni, “made some significant decisions, in order to accelerate the reorganisation process, guarantee the coordination of management activities and strengthen control activities”, a statement by the company said,” the report further noted.
Meanwhile, AgustaWestland, today replied to the Indian show cause notice for cancelling the contract saying it has not indulged in any wrong practice, another PTI report said.
In its response, the firm has told the defence ministry that “its conduct has been fully compliant with the rules which regulate the AW101 helicopters contract signed with India”. AgustaWestland has said the Rs3,600 crore contract “was awarded to it following a comprehensive technical and flight evaluation of competing types performed by the IAF in accordance with the Defence Procurement Procedure (DPP),” the report further said.
The defence ministry is weighing proposals to give impetus to indigenisation of defence production by easing norms for private players, a report in the Hindustan Times newspaper has said.
The report adds that this move is a direct fall-out of the controversy regarding the controversial chopper deal.
“A South Block source said the first step would be to streamline the process of granting licences. The more than 300 firms awaiting licences say the regulatory mechanism is a nightmare. The ministry is likely to make some changes in the tendering format and specify the technologies needed to be brought in,” the report further said.
“Tax concessions may also be given to private players considering the long gestation period for defence projects,” it noted.
A team of Indian investigators could take the United Nations (UN) route to obtain investigation papers from Italian authorities probing the alleged irregularities in the chopper deal, The Hindu newspaper has reported.
“The two-member Central Bureau of Investigation (CBI) team camping in Italy in connection with the controversial chopper deal case is now exploring options under the United Nations Convention Against Corruption (UNCAC) to obtain documents on the alleged payment of Rs.362 crore as kickbacks in India to bag the Rs.3,600-crore deal,” the report said.
“CBI officials on Thursday met Italian foreign affairs officials to persuade them to part with the documents. Under UNCAC provisions member countries are bound to extend mutual legal assistance in prosecuting those involved in bribery, besides tracing and attaching proceeds of corruption. While Italy had ratified the Convention in October 2009, the Indian government ratified it in May 2011. The United Nations General Assembly had adopted the Convention through a resolution in 2003 and it came into force in December 2005,” the report further added.
21 February 2013
New Delhi: Senior management at Italy’s state-owned defence group Finmeccanica met Indian officials who are looking into allegations of corruption connected with their government’s purchase of a dozen helicopters, news agency Reuters said in a report from Italy.
“The meeting was ‘positive’ and will be discussed by Finmeccanica’s board later in the day,” the company’s new chief executive officer Alessandro Pansa said on Thursday. The Indian delegation is in Italy to collect evidence on the case, which centres on allegations that Finmeccanica paid bribes to win a €560 million ($750 million) contract for the sale of 12 helicopters to the Indian government,” the report further said.
Meanwhile, in a press statement issued on Thursday, AgustaWestland said it had told the Indian defence ministry that its “conduct has been fully compliant with the rules which regulate the AW101 helicopters contract signed with India”.
“The contract was awarded to AgustaWestland following a comprehensive technical and flight evaluation of competing types performed by the Indian Air Force in accordance with the defence procurement procedures. This evaluation demonstrated that the AW101 was the only aircraft able to fully meet the Indian Air Force’s operational requirements, as already confirmed by the Indian Authorities in different occasions,” the statement further said.
Foreign minister Salman Khurshid has said that the government will examine all legal angles to probe the alleged irregularities in the chopper deal.
“Notwithstanding the refusal of an Italian court to provide CBI with an authenticated copy of the chargesheet on the helicopter scam, government today said the doors are “never closed” as it will explore various legal options to get the required information,” the Press Trust of India said in a report.
“No, no, doors are never closed as long as the last court of the land does not say no to you, doors are never closed. And if you go by some of our jurisprudence, even if the last decision is given, there are still opportunities for review,” PTI cited Khurshid as saying.
20 February 2013
The Central Bureau of Investigation (CBI) has engaged two law firms in Italy for liaisoning with the authorities to get legal assistance in probing the role of Indians in connection with the alleged kickbacks in the Rs. 3,600 crore VVIP helicopter deal, the Press Trust of India has said in a report.
“Official sources said on Wednesday that Chiomenti law firm and Grippo law firm have been asked to help in coordinating with the Italian authorities for getting documents and other relevant material pertaining to the AgustaWestland deal for supplying 12 helicopters to India, the report said.
“The two firms will represent India’s case with the Italian government and the local courts for getting evidence regarding alleged kickbacks in the deal. Kickbacks to the tune of Rs 362 crore were allegedly paid to swing the deal in favour of AgustaWestland. The sources said the joint team of the CBI and defence ministry in Italy was told that the probe in that country was also in its initial stage and that arrests made in that country so far were more of a preventive nature so that the evidence was not tampered with,” the report further added.
In an interesting take on the controversy, Hindustan Times has said that following the controversy, President Pranab Mukherjee “will stay clear of the controversial Italian AW101 helicopters.” Mukherjee is set to visit Rajasthan’s Pokhran on 22 February as the chief guest in the ongoing IAF firepower demonstration code named ‘Iron Fist’
“Official sources suggest that his office had informally enquired to see that the AW101 chopper is not used to ferry him from Jaisalmer airbase to the Pokhran desert—the venue of the exercise. IAF officially maintains that the AW101s had not been assigned to VVIP duties yet as pilots and crews were training and undergoing conversion to operate the new platform. The Indian Air Force has inducted three AgustaWestland AW101.The first chopper joined the air force fleet in December 2012, while the third was inducted in January 2013,” the report says.
19 February 2013
New Delhi: The government on Tuesday expressed readiness for a Joint Parliamentary Committee (JPC) probe, saying it has nothing to hide and “our hands are very clean,” the Press Trust of India said in a story. “Defence minister A.K. Antony, who is at the centre of the attack, ruled out his resignation and said he was prepared to explain everything in Parliament,” the report added.
Meanwhile, in a statement on Tuesday, Finmeccanica said that “ready to cooperate with the Indian authorities in order to clarify the matter and will collaborate in accordance with international procedures applicable to an investigation of this kind.”
“Finmeccanica is confident that AgustaWestland will demonstrate that it has fully complied with Indian law and the above mentioned ethics principles,” the company statement added.
Leader of Opposition in Rajya Sabha, Arun Jaitley has said that the government must identify all the bribe takers in the controversial chopper deal.
“The Bharatiya Janata Party (BJP) leader said that it was the responsibility of the government to identify the bribe takers in the case, adding, “debate on AgustaWestland in Parliament is not a substitute for the identification of the bribe taker,” “ a news report on CNN-IBN news channel said.
“When asked if he suspected that someone having authority, and not a middleman, was the real bribe taker in the chopper deal case, Jaitley said, “A middleman gets commission, bribes go to the decision makers.” Though the Rajya Sabha leader of opposition agreed that the probe by the government could take some time, he said that it was about the intention of the government if it wanted to bring out the truth in the case,” the report said.
“The government certainly can have some time...if the government is honest, identification in possible,” the report cited him as saying.
An NDTV report has said that the Indian team in Italy, in connection with probing the deal, has hit a roadblock. “Till now, they haven’t had much luck with local authorities. On 13 February, Indian embassy officials sent a letter to the local court for more details about the arrest of Finnmeccanica CEO. They were politely turned down in just three days, with the court citing secrecy laws. Now, the main prosecutor Eugenio Fusco is invoking those laws to turn down a request to meet with Indian Investigators. So, the team on Wednesday late afternoon will meet with Judge Luka Labianca but it’s uncertain whether information will actually be disclosed,” the report said.
Defence minister A.K. Antony said on Tuesday that the government is willing to provide Parliament with details of a Rs.3,600 crore helicopter deal that has become controversial because of allegations that kickbacks were involved in the deal, Mint said in a story.
“There is no question of lack of coordination with the ministry of external affairs,” the report quoted Antony as saying.
Meanwhile, curiously, Antony was not a part of the ministers that met the visiting British prime minister David Cameron, the Press Trust of India said.
“Defence minister A.K. Antony is not part of Prime Minister Manmohan Singh’s delegation that will hold talks with British Prime Minister David Cameron during which defence deals are expected to come up for discussion. The defence minister is not part of the delegation, ministry officials said. However, no reasons were given for Antony not being part of the delegation,” the report said.
Cameron has “promised full cooperation with India and its police as a probe into alleged kickbacks in a helicopter deal,” AFP news service said. “While keen to still convince India of the merits of the part-British Eurofighter military jets, he has been dogged by another defence deal involving the Anglo-Italian helicopter maker AgustaWestland,” the report added.
A report by ANI news service says that foreign minister Salman Khurshid said that he has “not expressed any reservation over the Defence Ministry’s move to scrap the Rs.3,546 crore AgustaWestland VVIP chopper deal, and added that his comment was a sensible one.”
“Khurshid had earlier expressed his reservation on the defence ministry’s plan to scrap the deal. He had also stressed that the final decision would be taken when the issue would be brought before the Cabinet Committee on Security (CCS), the highest decision-making body on defence-related matters. Both Khurshid and Defence Minister A.K. Antony are members of the CCS,” the report further said.
“Government is split over the need to cancel the helicopter deal with AgustaWestland, with foreign minister Salman Khurshid expressing his unease over the defence ministry’s move to scrap the Rs.3,546 crore contract,” a report in The Times of India newspaper has said.
“The comments suggest that the desire to punish Finmeccanica for paying bribes to clinch the deal should not overwhelm the need to shore up defence. Khurshid even stressed that whether the Italians violated any Indian law is yet to be determined,” the report added.
Another report in The Times of India has said that Christian Michel may have been an intelligence asset for the Indian agencies.
“In the murky world of Indian arms deals Christian Michel is a powerful operative, who bribes politicians and officials to push through deals and at the expense of manipulating national security projections and procurement processes. But in India’s intelligence world he is a friend of several former intelligence czars. He is a much-coveted source in Europe, someone who had to be extended privileged treatment,” the report has said.
“The inherent contradictions reflect the two worlds which often overlap. But it is also a tale of the UK resident, who drew his initial power in India from his late father Wolfgang Richard Max, a powerful presence in India for several decades. Max called himself an invest banker, but was an influential deal-maker for any foreigner wanting to do business in India. He had extensive contacts both in the Congress party and security apparatus. Michel inherited his father’s legacy, but fell out with him soon, according to an intelligence operative who has known the family for years,” the report goes on to add.
“A Central Bureau of Investigation team has left for Italy to probe the allegations of kickbacks in the Rs.3,760 crore deal for the 12 AgustaWestland101 choppers, a report said,” Hindustan Times newspaper has reported.
“A CBI team will probe if firms had been floated to route kickbacks in the helicopter deal with AgustaWestland, a Britain-based subsidiary of Italian firm Finmeccanica. Reportedly, the investigating agency has so far not registered a case as it wants to get more information about the kickbacks and establish authenticity of documents,” the report added.
“Rejecting charges that it was not proactive in probing allegations of kickbacks in the chopper deal, the government on Sunday said it would act only according to the law and not to please the Opposition in this case,” it further said.
18 February 2013
New Delhi: A report in The Hindu has said that since the Italian court looking into the chopper deal case has refused to share details of the cases with the Indian government, a long drawn out battle could be on the cards.
“As a joint team of the CBI, ministry of defence and external affairs is scheduled to arrive in Italy on Tuesday, it would be a hard task for them to mount efforts to find out the beneficiaries from India of the alleged kickbacks in the Rs3,600 crore VVIP chopper deal that was inked with AgustaWestland, a subsidiary of Finmeccanica, in February 2010,” The Hindu newspaper says.
“In the absence of details coming out of judicial channels in Italy into the hands of the Indian investigators, they can scrutinise minutely the probe report of the Italian investigators who have conducted their probe over the past one year into the activities of Finmeccanica, suspected of involvement in international corruption to bag deals not only in India but in other countries as well,” it adds.
A Press Trust of India report has said that in the wake of the allegations related to the chopper deal, “an Italian lawmaker has reportedly asked Prime Minister Mario Monti to reveal the names of journalists and media workers on the payroll of former CEO of the defence firm Giuseppe Orsi.”
“Senator Raffaele Lauro, a member of the Italian finance committee, asked Monti to “eradicate the rot” of alleged collusion between world of information and top management of companies, according to Italian media reports,” the PTI report adds.
“The report filed by Italian investigators in the court of Tribunale Busto Arsizio there had alleged that Orsi had told Finmeccanica’s chief press officer to manage at least 20 journalists for 20-30 months for a print campaign to improve the image of the firm,” it further says.
Speaking for the first time on the chopper deal, Prime Minister Manmohan Singh said on Monday that the government has nothing to hide in the controversial procurement of helicopters by the defence ministry from AgustaWestland, Mint reported.
The defence ministry has said that it will scrap the helicopter deal and issued notices to AgustaWestland over alleged kickbacks paid to procure the contract, signed in 2010.
Meanwhile, The Indian Express newspaper said in a report that “Italian investigators probing money trail in the VVIP chopper deal kickbacks have stumbled upon the name of a suspected top Tata Steel executive.”
“He figures in the conversation between one of the key accused middlemen and AgustaWestland officials, where they are discussing their line of defence before the prosecutors. The name crops up in the context of a company being set up in Tunisia, with Switzerland-based middleman Guido Haschke claiming that it is a buffer company that will not directly link him to the chopper firm. An Italian investigation report, a copy of which is with The Indian Express, notes that “the link to Tunisia is important as AgustaWestland is paying Haschke’s ‘dues’ in Tunisia”. The man is named in the conversation as “Partha” and Italian investigators have noted in the report that the reference seems to be to Partha Sengupta, vice-president of Tata Steel Ltd, who is alleged to have been in regular touch with top Agusta official Bruno Spagnolini, who is among those arrested in Italy,” the newspaper report added.
Foreign minister Salman Khurshid has said that India is in touch with Italian authorities over the chopper deal issue.
“A CBI team is likely to leave for Italy on Monday to probe the allegations of kickbacks in the Rs.3,760 crore deal for the 12 AgustaWestland 101 choppers, officials said. Official sources said the team, comprising a senior investigating officer of the Central Bureau of Investigation (CBI) and a law officer, would meet Italian prosecutors to ascertain the details of the case,” a report in Hindustan Times said.
“Former union minister of state for coal Santosh Bagrodia’s younger brother Satish Bagrodia is a director in Chandigarh-based IDS Infotech Limited, which Italian investigators allege was a key vehicle to route the AgustaWestland deal bribe money to India in the garb of fake software and engineering contracts,” another Hindustan Times report has said.
“According to documents accessed by HT, Partap Krishan Agarwal is managing director of IDS Infotech, and Satish Bagrodia, his two sons Ashish Bagrodia and Manish Bagrodia, and Yog Prakash Agarwal and Narinder Agarwal are other directors. Satish and Manish were appointed directors in 1989, while Ashish Bagrodia became a director in the company in 2005,” the report adds.
17 February 2013
New Delhi: Alleged middleman Guido Haschke had “cleaned up” all the documents related to the chopper scam from his computer but Italian investigators recovered them from his hard drive along with other papers he had hidden in his mother’s home, the Press Trust of India reported, citing media reports. According to reports, PTI said, the Italian investigators have termed the details found in his computer drives as “Pandora’s box” where he has noted details of his appointments, his meetings with Indian intermediaries, in Italy and Lugano and several international transactions including that of Finmeccanica.
The Central Bureau of Investigation has engaged a lawyer in Italy to represent India’s case with the Italian government and the local courts to find out the role of Indians in the alleged kickbacks in the Rs 3,600 crore VVIP helicopter deal, the Press Trust of India reported. The report, quoting Official sources, said the lawyer, if necessary, would approach the court in Italy to get related documents, they said. A team of CBI and Defence Ministry officials is leaving for Italy on Monday to verify allegations of kickbacks in the supply of 12 AgustaWestland helicopters.
The ongoing investigations in the alleged bribery case against AgustaWestland’s helicopter deal with India will not have any impact on the tie-up between the Tata Group and the Italian chopper maker, a spokesperson of the joint venture firm told the Press Trust of India . Finmeccanica-owned helicopter maker AgustaWestland signed an MoU in 2009 with the Tata group for a joint venture company - Indian Rotorcraft Ltd - at the GMR Hyderabad Aviation SEZ Ltd.
A report by the news agency PTI has said that it was revealed on Sunday that alleged middleman Guido Haschke had “cleaned up” all the documents from his computer related to the VVIP chopper deal.
“However, to Haschke’s misfortune the documents were retrieved from his computer hard drive along with other papers he had hidden at his mother’s home,” PTI reported citing reports in the Italian media.
“According to reports in the Italian media, the investigators termed the information found in his computer drives as a “Pandora’s box” where he has noted details of his appointments, his meetings with Indian intermediaries, in Italy and Lugano and several international transactions including that of Finmeccanica,” the PTI report added.
Another PTI report has said that the CBI has engaged a lawyer in Italy to represent India’s case with the Italian government and the local courts to find out the role of Indians in the alleged kickbacks in the Rs3,600 crore VVIP chopper deal.
“Official sources said on Sunday that the assistance of a lawyer was taken to help understand the Italian law and expedite getting documents from the helicopter company. The lawyer, if necessary, would be approaching the court in Italy for procurement of documents, they said,” the report noted.
India is likely to raise the issue of the alleged irregularities in the chopper deal, a report by the Press Trust of India (PTI) has said.
“Arriving here within days of exposure of the Rs.4000-crore VVIP helicopters scam involving Anglo-Italian firm AgustaWestland, UK Prime Minister David Cameron is likely to be pressed for more information in this regard during his meetings with the leadership on Tuesday,” the report said.
“India has already issued a note verbale and met with UK Foreign Office officials to get information and assistance in probing the allegations of corruption in the deal, an official spokesperson in the Ministry of External Affairs said,” the report further added.
A report in CNN-IBN news channel has said that the father of the “mysterious middleman” Christian Michel, named in the Italian report on the alleged corrupt chopper deal “had huge business interests in India and was very close to Congress leaders in the 1990s.”
“Even though very little is known about him so far, it is clear that his relationship with Indian politicians goes back a long way. CNN-IBN enquiry has revealed there was only one entry on Registrar of Company website in the name of Christian Michel James. The entry’s Director Identification Number (DIN), 02657302, shows Christian’s date of birth as December 12, 1961,” the report says.
“Christian’s father, Michael Wolfgang, had huge business interests in India and was very close to Congress leader in 1990s, according to sources. Christian has inherited a lot of business and political contacts from his father over the past ten years,” the report goes on to add.
A report on Firstpost.com said that the Comptroller and Auditor General (CAG) is ready with a draft report on the chopper deal.
“The CAG has sent its observations over the deal in the draft report to the ministry last week for comments. As per the norms the ministry would be expected to file its comments on CAG draft report observations within a period of 45 days. There is, however, no written regulation under which could make it mandatory for the ministry to adhere to this time frame. If it goes as per the schedule, the final report should be ready to for presenting in Parliament during the second half of the budget session, which would begin from 22 April and continue till 10 May. The incumbent CAG Vinod Rai is due to retire in May this year from his post,” the Firstpost.com news report says.
Russia may “end up the big winner if India’s cancellation of the Rs.3,760-crore helicopter contract with AgustaWestland goes through,” a news reportin Hindustan Times newspaper said.
“Top air force sources said India would consider going back to Russia to acquire a new VVIP fleet to replace its ageing Russian-made Mi-8 choppers of 1970s vintage, due to be phased out next year. A fresh global tender may not be floated as this could delay the process by seven to eight years, as reported by HT on Saturday,” the report further says.
16 February 2013
A news report published by NDTV news channel has said that AgustaWestland may perhaps have been involved in another scandal, although it goes on to say that it cannot conclusively confirm this.
“Now, documents accessed by NDTV suggest that the manufacturer also offered commissions to a company if AgustaWestland (AW) bagged a deal to supply helicopters and spare parts to the Delhi Police,” the report says. “The deal did not go through and NDTV cannot independently verify the authenticity of the documents. Delhi Police commissioner Neeraj Kumar told NDTV that in August 2009, when the purported contract was signed, he was a senior officer in charge of administration and security, and that no deal with AW was considered. The “internal agreement”, effectively a consulting contract, is signed by Bruno Spagnolini, the head of AW, who is under house arrest in Italy for the VVIP chopper deal,” the report further adds. “The agreement offered an eight per cent commission for helicopter sales and a 15% commission for spare parts to New York-based Ganton Ltd and controversial businessman Abhishek Verma, who is already in jail for shady arms dealings. The documents say the commissions would apply only if negotiations were ‘successfully finalized’. His New York based-partner and president of Ganton, Edmond Allen, has been writing to the Indian government since early last year, disclosing alleged details of illicit and allegedly corrupt defence deals involving Mr Verma who at one time was his business associate,” it further says.
Another NDTV report says that “two alleged middlemen involved in the VVIP chopper deal, Guido Haschke and Christian Michael, could be negotiating with Italian authorities to turn approvers in return for being spared a jail term”.
“Italian prosecutors believe that along with the AgustaWestland kickbacks case, they could provide leads in several other international defence deals that are on their radar. Sources say these cases have links leading up to the UK, Switzerland, and Dubai,” the report further adds.
The Italian court looking into the case has refused to share documents with India, a report by the Press Trust of India has said.
“On Friday, India initiated the process to scrap the deal to acquire 12 VVIP helicopters with Italian firm AgustaWestland, and sent a show cause notice to the firm over allegations that kickbacks were paid to Indian officials, including former Air Force chief SP Tyagi. Meanwhile, a joint team of CBI and Defence Ministry is likely to leave for Italy on Sunday to probe the alleged kickbacks in the Rs. 3,600 crore VVIP helicopter deal,” the news report said.
“CBI sources said the team will meet Italian prosecutors to ascertain the details of the case. The sources said two members of CBI comprising DIG-level officer and a law officer besides officers from the Defence Ministry will be part of the team,” the report further added.
Meanwhile, in a press release issued on Saturday afternoon, AgustaWestland has said that as for “media reports alleging that Indian Authorities have cancelled the VVIP helicopters contract, AgustaWestland clarifies that the Indian Authorities have not cancelled the contract but have requested some clarifications within seven days.”
AgustaWestland is “preparing its answer to timely meet the Indian authorities’ request,” the release said.
On Friday, Emaar MGF Land Limited had issued a statement on its association with a Guido R Hashke, one of the people under investigation..
“While Guido R Hashke was an independent non-executive director for an extremely brief period of approximately two months i.e. 25 September 2009 to 7 December 2009, Emaar MGF has had no association with him or any of his businesses/associates other than this. Mr. Hashke was appointed on the Board of the Company due to the statutory requirement of having certain number of independent directors on the board to be a publicly listed company. Therefore he was appointed as an independent director to fulfill the requirements of the company’s proposed IPO at that time,” the statement had said. “We wish to state on record that he did not attend any board meeting during his tenure of appointment and infact has never visited our offices at any time nor has had any meetings with any of our officials at any time. Furthermore, he has not represented the company in any forum at any time,” the company statement further added.
15 February 2013
A report in The Indian Express newspaper has highlighted the fact that after retirement, former Air Force chief S.P. Tyagi has become the “chairman of Williams Global Advisors, which offers consultancy in the aerospace and aviation sectors.”
“The company website earlier had a picture of Tyagi in flying gear; on Thursday, his name was missing from the site. However, the co-founder and president of the company, John Williams, clarified that Tyagi was still part of the firm,” the news report said.
“Tyagi is also actively associated with the Vivekananda International Foundation, a New Delhi-based think tank known for its pro-BJP and pro-RSS leanings. A senior member of the VIF advisory board confirmed that “Tyagi is very active in the foundation’s functions and activities,” the report further notes.
India has formally taken a step toward scrapping the controversial helicopter deal, Press Trust of India reports.
“The defence ministry issued a show cause notice to AgustaWestland, asking it to explain within seven days the bribery allegations, ministry spokesman Sitanshu Kar said. The notice asked the company why the Rs.3,600 crore deal of 2010 should not be scrapped,” the PTI report said.
“The notice comes a day after the ministry warned of legal action, including invoking integrity pact which provides for cancellation of the contract if bribes are paid and recovery of the money already paid,” the report further noted.
Meanwhile, another PTIreport has said that Italian prime minister Mario Monti “has said that his government would guarantee the “correct governance” of state-controlled defence firm Finmeccanica following arrest of its chief executive on corruption charges in the Rs. 3,600 crore VVIP helicopter deal with India.”
A report in The Economic Times newspaper has said that the controversy surrounding the helicopter deal could put in jeopardy the India expansion plans of Finmeccanica, whose UK subsidiary AgustaWestland is at the heart of the affair.
“The JV, Indian Rotorcraft Ltd, is between Tata Sons and AgustaWestland and was set up to establish an assembly line for the AW-119 helicopters meant for both defence and civilian sectors in India and overseas. A year later in 2011, the GMR Group signed an in-principle agreement with Indian Rotorcraft to locate its assembly and testing facility within the GMR aero-SEZ adjoining the Hyderabad airport,” the news report said. “As per the 2010 agreement, Indian Rotorcraft was responsible for the final assembly, completion and delivery of the AW-119s while Agusta had to manage global marketing and sales. The first aircraft was scheduled for delivery from the new Hyderabad facility in 2011. The production was scheduled at 30 aircraft per year to meet worldwide demand. However, the assembly is now scheduled to begin only next year — two years after the ground-breaking ceremony,” the report further noted.
Meanwhile, Press Trust of India reported Friday that the Indian government had again written to Italian authorities seeking details of the investigations underway there. Another PTI report said that officials from the CBI, probing the deal, met defence ministry officials on Friday.
In yet another report filed from Rome, PTI has said that “former chief executive of Italian defence and aerospace giant Finmeccanica, Giuseppe Orsi, and the former head of its helicopter division Agusta Westland, Bruno Spagnolini, were due to appear before a judge. Bribes amounting to €20 million ($27 million) were paid through two Switzerland-based intermediaries, Guido Haschke and Carlo Gerosa, who are officially fugitives, Italian media said citing investigative documents.”
“Bribes amounting to €20 million ($27 million) were paid through two Switzerland-based intermediaries, Guido Haschke and Carlo Gerosa, who are officially fugitives, Italian media said citing investigative documents. Total bribes paid for the 556-million-euro deal were 30 million euros, investigators believe. Investigators say payments were made through Tunisia-registered companies controlled by Haschke and Gerosa and were then transferred to accounts in India and Mauritius belonging to a company called Aeromatrix,” the PTI report further said.
At least three of the key decision-makers who took a call on the controversial chopper deal enjoy constitutional immunity. “Even as the UPA government’s factsheet on the AgustaWestland helicopter deal can bring embarrassment for the Congress, three key decision makers who were involved in finalising the deal including President Pranab Mukherjee enjoy Constitutional immunity,” a report by CNN-IBN says.
“The defence ministry’s factsheet categorically states that the tender was finalised in 2005—a time when President Pranab was the defence minister, S.P. Tyagi was Air Force Chief, Bharat Vir Wanchoo was SPG Chief and M.K. Narayanan was the National Security Advisor,” the report goes on to add.
Both Wanchoo and Narayanan are now governors of Goa and West Bengal, respectively.
The controversial helicopter deal could eventually be scrapped, said the Times of India report. “Sources said defence minister A.K. Antony is determined to get to the bottom of the bribery scandal threatening to taint his squeaky clean political track record. Government circles acknowledge the Rs.3,546-crore contract for 12 AW-101 helicopters, inked in February 2010, has emerged as a test case for Antony, who has built his entire political career on his reputation for honesty,” the report said.
“The defence ministry signalled its intent on Thursday by asking the chief executive officer of AgustaWestland to “categorically” state whether the company indeed paid bribes to swing the deal. In a letter, the ministry insisted on a “clear position” in view of the current developments. “AgustaWestland has been asked to specifically indicate if any financial transaction has taken place with any Indian individual or entity, which would be in violation of the integrity pact or other terms and conditions of the contract,” it said,” the report further noted.
The Times of India has also detailed a curious case of a company called IDS India, which supposedly routed money, but which it says does not exist in any official records.
“A search through the records of the ministry of corporate affairs threw up several companies with similar names, but nothing by the name of IDS India. The IDS connection runs through the entire trail of kickbacks although little is known about the people behind it. Questions are being raised about the relations between IDS Mauritius and two Chandigarh-based companies, IDS Infotech and Aeromatrix, whose holding company is IDS Mauritius. Aeromatrix was promoted by three men, Guido Haschke, Carlo Gerosa and Gautam Khaitan, who are suspects in the Italian investigations into bribery in the Indian deal,” the report said.
The Indian Express has said that a “London-based consultant, Christian Michel, who was allegedly paid the lion’s share of the €51 million kickback in the VVIP chopper deal, is apparently an old player in the Indian defence market, and even had an agreement with French firm Dassault to get a commission for the sale of its Mirage 2000 fighters to the Indian Air Force.”
The french defence company is in advanced negotiations with the Indian government for the multi-billion dollar deal to sell fighter jets to the Indian Air Force.
“Michel, who was allegedly paid €30 million as kickbacks by Italy’s Finmeccanica for the VVIP chopper deal, had an agreement with Dassault for a 2.5% commission in a deal to sell 10 new Mirage 2000 fighters to India that was being negotiated in the late 1990’s, a French court document has revealed. Indian laws prohibit payment of commissions and hiring agents for defence deals,” the report further noted.
A Press Trust of India report has said that the alleged middlemen in the controversial deal have claimed that “the then Air Chief S.P. Tyagi used to brief them on the developments in the tender, according to Italian investigators.”
“Haschke and Gerosa have reportedly claimed that Tyagi would keep them updated on the tender for the 12 helicopters during their meetings, which are believed to have taken place six to seven times. They have also claimed that they had managed to modify conditions of the tender, including reducing the flight ceiling from 18,000 to 15,000 feet, which made Augusta’s AW- 101 eligible for the bid, according to a report filed by investigators in an Italian court,” the news report notes.
A report in Hindustan Times has said that intercepts of “conversations involving senior officials of AgustaWestland—the British subsidiary of Finmeccanica—and middlemen, recorded and transcribed by prosecutors in documents filed before an Italian court, paint a picture of men living the high life with few worries about getting caught.”
“Giorgio Zappa, the former CEO of Finmeccanica, told investigators about an incident in India, where Guiseppe Orsi—the arrested Finmeccanica chief—and Hashkhe were having dinner in the same restaurant as the representatives of American rival Sikorsky, which was also in the race for VVIP choppers. The Finmeccanica team seemed so confident if winning the deal that Haskhe got up, went over to the Americans and handed them a note, which brashly asserted: “(You) do not always win,” “ the report says, citing Italian investigation documents.
14 February 2013
New Delhi: The defence ministry on Thursday evening issued the following detailed statement on the issue concerning the chopper deal.
1. In August 1999, the IAF which is responsible for carrying out VVIP communication task, proposed the replacement of Mi-8 VIP helicopters due to severe operational constraints, such as, inability of Mi-8 to operate at night and in adverse weather, inability to operate safely at places in elevation beyond 2000 meters etc. IAF felt the need for the replacement of Mi-8 helicopters as they were completing their total technical life.
2. A global RFP was issued in March 2002 to which 4 vendors responded. The Technical Evaluation Committee shortlisted 3 helicopters and accordingly flight evaluations were conducted. Since, EH-101 of M/s. AgustaWestland was not certified for an altitude of 6000 meters, it did not participate in the flight evaluation. The Russian helicopter Mi-172 could not comply with 7 mandatory Operational Requirements (ORs). After flight evaluation, EC-225 of M/s. Eurocopter, France was found suitable for acquisition.
3. On November 19, 2003 a meeting was taken by Principal Secretary to PM on this subject. In the meeting, Principal Secretary observed that his main concern was that the framing of the mandatory requirements has led us effectively into a single vendor situation. It was also noted that PM and President have rarely made visits to places involving flying at an altitude beyond 4500 meters. In the meeting it was decided to make the mandatory requirement for operational altitude 4500 meters. The higher flying ceiling of 6000 meters, and a cabinet height of 1.8 meters could be made desirable operational requirements. It was observed that with these revisions, several helicopters which otherwise met all requirements but had been rejected due to the altitude restriction, would now come into the reckoning.
4. The meeting was followed by a letter dated 22nd December, 2003 from the Principal Secretary to PM to the Air Chief, stating that it was unfortunate that neither PMO nor SPG was consulted while framing these mandatory requirements. He suggested that CAS and Defence Secretary may jointly review the matter to draw up realistic mandatory requirements satisfying operational, security and convenience requirements of VVIPs and also set in motion a fast track process for selection and acquisition of the replacement helicopters.
5. In pursuance of the above directive, the ORs were deliberated at length between IAF, NSA, SPG/PMO and MoD between March, 2005 to September, 2006 and the above indicated changes were incorporated.
6. The required numbers of helicopters for the entourage of VVIP was further deliberated between Air HQ, MoD and SPG/PMO. The quantity of helicopters proposed for procurement was revised from 8 to 12 helicopters by adding 4 helicopters in non-VIP configuration for security reasons.
7. The AON for the procurement of 12 helicopters was accorded by the Defence Acquisition Council under ‘Buy’ category with 30 percent offsets on 3rd January, 2006. RFP was issued to 6 vendors on 27th September, 2006.
8. Three vendors, namely M/s Sikorsky, USA (S-92 helicopter), M/s AgustaWestland, UK (EH-101 helicopter) and M/s. Rosoboronexport, Russia (Mi-172 helicopter) responded to the RFP.
9. M/s. Rosoboronexport did not submit earnest money deposit and the Integrity Pact, along with their Technical and Commercial proposals. It had been made clear to M/s Rosoboronexport in February 2007 that this was a global tender and hence every contractual clause would be the same for all vendors. As no Integrity Pact and Earnest Money Deposit were received from M/s Rosoboronexport, their Techno-Commercial offer was not accepted.
10. The Technical Evaluation Committee evaluated the technical proposals of M/s Sikorsky and M/s AgustaWestland and recommended field evaluation trials of their helicopters.
11. The Field Evaluation Trial of M/s AgustaWestland was carried out in UK and trials of M/s Sikorsky were carried out in USA from 16 January 2008 to February 2008. The Field Evaluation Trial team submitted its report in April 2008 and recommended AW-101 helicopter of M/s AgustaWestland for induction into Service. SPG was also part of the Field Evaluation Trial team.
12. The Staff Evaluation Report of Air HQ concluded that the S-92 helicopter was non-compliant with respect to four SQRs for the VVIP helicopter (Missile Approach Warning System, Service Ceiling of 4.5 km, Drift Down Altitude and Hover Out of Ground Effect). The Staff Evaluation Report assessed the VVIP helicopter AW-101 to be fully compliant with all SQRs.
13. Technical Oversight Committee constituted on 6 August 2008 found that the field evaluation trials, compliance to SQRs and selection of vendors were done according to the prescribed procedures.
14. Contract Negotiation Committee (CNC) was constituted and it carried out its discussions with the vendor between 19 September 2008 and 21 January, 2009. While the CNC was progressing its discussions, Air HQ, recommended inclusion of Traffic Collusion Avoidance System (TCAS-II) and Enhanced Ground Proximity Warning System (EGPWS) for all 12 helicopters and SPG/PMO recommended inclusion of Medevac System for 8 VVIP helicopters. These additional equipment were considered to be essential for safe and effective operation of the helicopter in VVIP transportation role. SPG also agreed to these requirements. The CNC, thereafter, recommended conclusion of the contract at a negotiated price of EURO 556.262 million.
15. On completion of CNC the proposal was submitted for approval of the Cabinet Committee on Security (CCS). The CCS considered the proposal in its meeting held on 18 January 2010 and approved the proposal.
16. In pursuance of the decision of the CCS the Ministry of Defence concluded a contract for the supply of 12 AW-101 VVIP helicopter with M/s AgustaWestland, UK on 08 February, 2010.
17. The procurement case was, thus, progressed in accordance with the established procurement procedure in a transparent manner with all stages of procurement being followed meticulously. Security aspects as required by SPG/PMO and IAF were fully taken into consideration. The role of PMO which began in 2003 was to ensure that security, communication and other requirements of VVIP security were taken care of and the helicopter for VVIP use is selected on the basis of broad based QRs.
18. Contract signed with M/s. AgustaWestland includes specific contractual provisions against bribery and the use of undue influence. Article 22 of the contract deals with penalty for use of undue influence. This clause entitles the ‘Buyer’ to cancel the contract with the ‘Seller’ and recover from him the amount of any loss arising from such cancellation. Article 23 of the contract dealing with agents and agency commission requires the ‘Seller’ to confirm and declare that he has not engaged any individual or firm, whether Indian or foreign, whosoever, to intercede, facilitate or in any way to recommend to the Government of India or any of its functionaries, whether officially or unofficially, to award of the contract to the ‘Seller’ nor has any amount been paid, promised or intended to be paid to any such individual or firm in respect of any such intercession, facilitation or recommendation. This clause further entitles the ‘Buyer’ to consider cancellation of the contract without any entitlement or compensation to the ‘Seller’ who shall be liable to refund all payments made by the ‘Buyer’ in terms of the contract along with interest.
19. In addition to the above contractual provisions, M/s. Agusta Westland has signed an Integrity Pact with the Government. The validity of this Integrity Pact is from the date of its signing and extends up to five years or the complete execution of the contract whichever is later. Under the Integrity Pact, the bidder commits himself to take all measures necessary to prevent corrupt practices, unfair means and illegal activities during any stage of the bid or during any pre-contract or post-contract stage. Any breach of the provisions of the Integrity Pact entitles the ‘Buyer’ to take actions against the ‘Seller’ which includes forfeiture of the earnest money, performance bond, cancellation of the contract without giving any compensation, to recover all the sums already paid with interest, to cancel any other contracts with the bidder and to debar the bidder from entering into any bid from the Government for a minimum period of five years which may be extended, etc.
20. As regards, the allegations of unethical dealings in helicopter procurement case including involvement of middleman and payment of bribes etc., the first report in the media appeared in February 2012.
21. Immediately (the next day after the news item appeared in the papers) DG(Acq) in MoD sought a factual report in the matter from our Embassy in Rome.
22. MoD also noted the report in the ‘Hindu’ of 28.2.2012 that, quoting Finmeccanica, states that its subsidiary AgustaWestland is not involved in “any irregularity in the deal”.
23. Subsequently, MoD received more than one communication from M/s AgustaWestland confirming that the statements in the press are “completely unfounded and have been issued with malicious intent” and that “no commissions whatsoever were paid” in the case.
24. In April 2012, MoD wrote again to our Embassy in Rome seeking an update.
25. A detailed report on the status of the case was received from our Embassy in Rome in May 2012. The report made it clear that there are inherent difficulties in obtaining formal details of the case given the independence of the judiciary from the executive in Italy.
26. MoD in July 2012 wrote to our embassy in Rome stating that it could approach the concerned judicial authorities directly. A formal request was indeed made by the embassy to the Naples prosecutors office on July 16, 2012.
27. Since factual information was difficult to arrive at, Defence Secretary wrote to Secretary (West), MEA, in October 2012 reiterating the importance of the need to get information from the Italian authorities so that MoD could take further necessary action in this regard.
28. MEA’s response again was that the matter had been taken up with the Italian side and the position conveyed for the need for ‘reliable information’, for “news reports alone could not be the basis for the Ministry of Defence to make any preliminary determination”.
29. In October 2012 Defence Secretary also wrote to Secretary (West) to take up the matter with the Government of U.K. in view of the alleged involvement of a British citizen and the fact that the contract was signed with M/s AgustaWestland, U.K.
30. In November 2012, Secretary (West), MEA, replied to Defence Secretary stating that ‘the U.K. authorities were waiting for the results of the Italian investigation in order to ascertain whether there are further actions to take’.
31. Earlier, in connection with the letter received from one
Mr. Edmund Allen of Ganton Limited, USA, MoD had written on 19.4.12 to CBI and Enforcement Directorate for necessary action, as Abhishek Verma and others were also being named in various media reports in connection with several defence deals. Later, Enforcement Directorate informed MoD in July 2012 that they were enquiring into the allegations.
32. In November 2012, a letter was received in MoD from the Director, Income Tax (Investigations) regarding allegations against Indians possibly involved in the deal as middlemen and seeking information about them. The current status of the case was conveyed to the income tax authorities in January 2013; in return, MoD asked Income Tax to share with it any ‘credible information’.
33. Throughout the process of this case, MoD has been prompt to take action on newspaper reports, and to seek factual information from the concerned authorities. Since foreign governments are involved, MoD has consistently pursued the matter though MEA.
34. As soon as information was available of one concrete step having been taken by the concerned foreign investigative authorities, namely, the arrest of Mr. Giuseppe Orsi, CEO, Finmeccanica on Feb 12, 2013. MoD handed over the case to CBI for investigation and put on hold all further payments to Agusta Westland. Besides this, the Indian Embassy has been requested to provide the factual position and any other relevant information. The CEO of M/s AgustaWestland has also been asked to categorically state the clear position in view of the current developments indicating specifically if any financial transaction has taken place with any Indian individual / entity which would be violative of the Integrity Pact or any other terms and conditions of the contract.
35. As already mentioned above, both the contract and integrity pact signed with M/s AgustaWestland, U.K., contain specific provisions by which strict action including cancellation of contract, recovery of payment, blacklisting and penal action can be taken against the vendors. Government is determined to take all possible legal and administrative action against the guilty parties and accordingly has ordered a thorough probe by CBI.
News agency Reuters has reported that Finmeccanica’s chief operating officer Alessandro Pansa will run the company as its chief executive officer after the arrest of its head for alleged bribery led India to suspend the deal to buy helicopters.
“After a hastily convened board meeting in Rome, Finmeccanica said Pansa, the chief operating officer, would step up to ensure management continuity following the arrest in northern Italy on Tuesday of chairman and chief executive Giuseppe Orsi,” the report said.
It is the latest in a series of scandals to shake the Italian business community ahead of an election in 10 days, the report further notes. The report further notes that on Tuesday Fitch put Finmeccanica’s rating under review for a possible downgrade saying the arrest raised risks of “material disruption”.
Meanwhile, former defence minister Jaswant Singh has admitted that changes were made in the tender during when the BJP led NDA government was in power, PTI has said in a report.
“Mr Singh, who was the defence minister in the Vajpayee government, said the guilty in the issue is an Italian company and people “have forgotten them,” the report noted.
“We should not make wild allegations against a former air chief. It is not in the interest of both the Air Force and the country. The probe is on. As Air Chief Marshal (retired) Tyagi himself is saying, the probe should be held early. Why don’t you agree to his suggestion,” Singh told PTI.
More details coming from the Italian investigation report suggest that “AgustaWestland had allegedly kept aside Rs.217 crore as part of “corrupt activity” to bag India’s Rs.3,600 crore deal and its choppers became eligible only after certain required parameters were altered in the tender document,” according to a Press Trust of India (PTI) report.
“According to the report filed by Italian investigators in an Italian court, the middlemen had agreed for a 7.5% commission in the Rs.3600 crore for 12 VVIP helicopters. Finally, the kickbacks were to the tune of about Rs.362 crore. The payment of bribes through contracts between firms registered in Tunisia and India, was “still underway” when the scam was unearthed. The report said CEO of Finmeccanica Giuseppe Orsi and AgustaWestland CEO Bruno Spagnolini had paid €30 million (Rs.217 crore) to one of the main middlemen Christian Michel,” the PTI news report noted.
Another PTI report cites Italy’s three-time former Prime Minister Silvio Berlusconi as saying that bribes are a necessary part of doing business globally.
“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations,” Berlusconi said in a televised interview. ”These are not crimes. We’re talking about paying a commission to someone in that country. Why, because those are the rules in that country,” the former premier was quoted as saying by Bloomberg, PTI says.
The PTI news report further cites the Italian news agency ANSA as quoting Berlusconi as saying that probes by Italian prosecutors into contracts Italian firms sign abroad were a form of “economic suicide”.“Everyone knows that as well as the tenders, agreements between governments are also involved,” Berlusconi said. He added: “The fact that there is the risk of magistrates intervening I consider to be economic suicide”.
The Indian Express, citing the same investigation report, has said that a succession war in the Italian defence firm blew the lid off the alleged scam.
“The investigation started in 2011 after an open succession war between Francesco Guarguanglini, who was then heading Finmeccanica, the parent company of Agusta, and his successor, Giuseppe Orsi, who now heads the Italian company. Meanwhile, late last year, Silvio Berlusconi’s coalition government, which had as coalition partners parties such as the far-right Lega Nord (now alleged to have received kickbacks to swing the deal in Italy), was replaced by one led by technocrat Mario Monti. This prompted Lorenzo Borgogni, a former top employee of Finmeccanica and an Orsi-baiter, to blow the whistle on Agusta’s deal with the Indian government. Borgogni told prosecutors in a detailed statement that kickbacks were paid by AgustaWestland for the Indian contract through the use of middlemen and that the total amount came up to €51 million,” The Indian Express news story says, citing the investigation report.
The alleged pay offs in the chopper deal may happened via software upgrades, that may have been used to front-end the same, The Times of India newspaper has said in a report, citing documents filed by Italian investigators in court.
“AgustaWestland, the British helicopter manufacturer, took cover behind India’s software exports to route funds it allegedly paid as kickbacks in the Rs.3,546 crore VVIP chopper deal,” the report said. “The British company, a subsidiary of Italian defence and aerospace firm Finmeccanica, routed up to €20 million (around Rs144 crore) in the deal signed in 2010 via Tunisia. The remittances were shown as payments for software developed in India, perhaps because the company reckoned that transfers would not attract suspicion, given the large volume of exports. Software exports are expected to cross $75 billion this year,” the report further added.
Meanwhile, in what could drag the principal opposition Bharatiya Janata Party (BJP) into the controversy, a report in the Press Trust of India has said that the technical requirements were changed in 2003, when the BJP-led National Democratic Alliance (NDA) was in power.
“Amid the uproar over alleged scam in the deal to procure 12 VVIP helicopters, it has emerged that changes were made in the qualitative requirements in the tender in 2003, when George Fernandes was the defence minister in the NDA government. The Rs3,600 crore deal was conceptualised during the tenure of Fernandes and the Air Staff Qualitative Requirement (ASQR) were changes in 2003, defence ministry offcials said here,” the report noted.
A report in The Indian Express newspaper has said that the kickbacks may have come in via monthly remittances made right upto December last year.
“The Italian investigation report into the VVIP AgustaWestland chopper scam has alleged that part of the €51 million kickbacks that were allegedly paid came in the form of monthly remittances that were disguised as payments made for engineering contracts. Italian investigators have managed to piece together evidence that at least €21 million was paid through engineering contracts on a monthly basis between 2007 and 2011. The payments were allegedly made through two companies — IDS India and IDS Tunisia. The report says money was paid partly through a ‘consultancy contract between AW and Gordian Services Sarl (a company which is attributable to them)’ and later engineering contracts,” the news report notes.
Another report in The Indian Express has said that Guido Haschke, a Swiss “middleman” may have met former air force chief S.P. Tyagi 6-7 times, thus putting in dispute Tyagi’s claims to the contrary.
“A Swiss-based middleman who was allegedly instrumental in fixing the IAF’s controversial VVIP chopper deal has confessed to Italian authorities that he had met the then Air chief S. P. Tyagi 6-7 times and had discussed the technical specifications for the contract with him. The middleman, Guido Haschke, has also said that he received €20 million as commission and of this, €12 million were passed on to S. P. Tyagi’s Delhi-based businessmen cousins Julie Tyagi, Docsa Tyagi and Sandeep Tyagi. The confession was recorded before prosecutors in November 2012, and included in the 64-page investigation report filed on Tuesday for the arrest of Finmeccanica CEO Giuseppe Orsi for his suspected role in arranging bribes to bag the Indian chopper contract,” the report said.
“Middlemen, girlfriends, family connections and of course hard cash—AgustaWestland representatives stopped at nothing to reach former air chief S.P. Tyagi and swing the chopper deal in the company’s favour, documents filed by Italian prosecutors say,” a report in The Hindustan Times newspaper says.
“A sum of around Rs70 lakh was paid in bribe to the “Tyagi family”, the prosecutors have said. The remaining money was transferred through a service contract facilitated by a company identified as IDS India. Conversations between middlemen—transcribed in the prosecution’s documents submitted to the court—indicate that their girlfriends were involved as they tried to liaise with the Tyagi cousins, especially Julie, who was given the money,” the news report further notes.
13 February 2013
New Delhi: In what is becoming reminiscent of the controversial Bofors gun deal of the 1980s, India’s former Air Force chief S.P. Tyagi’s name was on Wednesday dragged into a controversy surrounding a deal to procure 12 VVIP helicopters.
Following this, on late Wednesday evening, the Indian government put the deal on hold. To be sure, three of the 12 choppers have already been delivered. The government also put on hold another deal, to procure 197 light utility helicopters for an estimated Rs.8,000 crore.
“The defence ministry’s defence acquisition council (DAC), headed by minister A.K. Antony, did not take up the issue related to purchase of the light helicopters for the Army and IAF at an estimated cost of $1.5 billion (around Rs.8,000 crore),” a Firstpost.com report said.
On Tuesday, following the arrest in Italy of Finmeccanica chairman and chief executive officer Giuseppe Orsi, the Indian government had instituted a Central Bureau of Investigation (CBI) probe into the deal.
The Indian Express newspaper reported on Wednesday that Italian investigators had alleged that Italian defence firm Finmeccanica had bribed Tyagi when he was the Air Force chief to swing the controversial AgustaWestland VVIP chopper deal in favour of the company. AgustaWestland is a Finmeccanica subsidiary.
“The Italian inquest says that in exchange for kickbacks, Air Chief Marshal S.P. Tyagi, who was in office from 2004 to 2007, altered the tender for the helicopters so that AgustaWestland would bag the deal,” NDTV said in a report. “Rejecting those allegations, the former Air Force chief points out that the tender was changed in 2003, before he took over as Air Force chief, and that the deal was finalized and signed in 2010, three years after he retired,” the report added.
NDTV further said that the Italian investigators who arrested the Finmeccanica chief on Tuesday say that middlemen paid off Tyagi through a trio of brothers who are his cousins.
“They promised and managed to pay, through brothers Julie Tyagi, Docsa Tyagi and Sandeep Tyagi, a certain amount of money, not yet quantified, to Air Chief Marshal Shashi Tyagi...to perform and for having performed a deed against his office duties,” the channel cited the report of the Italian prosecutors as saying.
The deal first courted controversy in India in February last year, when an Italian newspaper La Repubblica reported that in 2010, the deal had generated “slush funds” to the tune of €10 million.
In 2011, the Italian attorney general’s office had begun investigating Finmeccanica for alleged fraudulent dealings, under which, it began probing the Rs.3,546 crore contract with the Indian government, to supply choppers that were to be used to ferry VVIPs, including the President and the Prime Minister.
Interestingly, in March, the government had said that after an initial investigation it had found no foul play in the purchase of the helicopters. Before this, the company too had denied any wrongdoing. “AgustaWestland is not involved in any irregularity concerning the supply of helicopters in India. No notice related to the investigations has been served,” Finmeccanica had said.
Defence minister Antony said that the CBI had been asked to give an early report on its probe into alleged kickbacks in the AgustaWestland helicopter deal. “Once we get the preliminary inquiry report from CBI, strongest action will be taken against those found guilty,” he said according to a report by CNN-IBN channel.