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Chopper deal, 2G furore resurrect corruption shadow on govt

A potential scandal is surfacing over suspected kickbacks by an Italian firm and a new front opening in the 2G case
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First Published: Tue, Feb 12 2013. 11 43 PM IST
A file photo of Finmeccanica CEO Giuseppe Orsi. Photo: Reuters
A file photo of Finmeccanica CEO Giuseppe Orsi. Photo: Reuters
Updated: Wed, Feb 13 2013. 01 11 AM IST
New Delhi/ Mumbai: Allegations of corruption have returned to haunt the Congress-led coalition government, with a potential scandal surfacing over suspected kickbacks paid by an Italian defence company to secure a deal from India and a new front opening up in the 2G scam case.
The government ordered a probe by the Central Bureau of Investigation (CBI) on Tuesday after Giuseppe Orsi, chief executive officer (CEO) of Finmeccanica SpA, was arrested in Rome for allegedly paying kickbacks for the deal to sell helicopters for VVIP security.
It came on the heels of media reports of an audio tape purported to contain a conversation between Unitech Ltd managing director Sanjay Chandra , one of the accused in the 2G scam, and a prosecutor dealing with the case. Excerpts from the tape were aired by the CNN-IBN television channel on Monday.
The opposition Bharatiya Janata Party (BJP) seized on both cases to launch a fresh attack against the Congress-led United Progressive Alliance government, which has been embroiled in numerous corruption allegations in its second term.
“Government should clarify the anomalies in the defence deal,” BJP spokesperson Prakash Javadekar said. “Action has been taken in Italy on the VVIP helicopter scam. The CEO of the company has been arrested. But no action has been taken here. The country which would have benefited from the deal has taken action, while the country which lost money has not done anything.”
India signed a $748 million (around Rs.4,040 crore today) deal in 2010 for the purchase of 12 helicopters with Anglo-Italian firm AgustaWestland NV, a unit of Finmeccanica. According to Italian prosecutors, the company paid nearly €51 million (around Rs.370 crore today) in kickbacks.
The BJP also hit out at the government over the audio tape in which a man purported to be A.K. Singh, a prosecutor in the 2G scam case, was heard advising Unitech’s Chandra on his defence strategy. The audio tape hasn’t been authenticated, and Chandra has said it wasn’t his voice on the tape. Singh has been transferred from the case, according to CBI. He couldn’t be reached for comment.
“The pattern of cover-up by Congress on all corruption and scam cases is now in the open,” Javadekar said about the surfacing of the audio tape.
A high-ranking CBI official, who refused to be identified given the sensitive nature of the case, said the agency had registered a preliminary enquiry, a step before registering a formal criminal complaint, against Singh and Chandra on 6 February.
Both were questioned by CBI on Monday and denied having the conversation, CBI officials said.
“This conversation appears to have happened in September. A team of officials within the CBI in investigating. We cannot say for sure where the conversation has been taped or recorded from a device kept during the conversation. It can be only verified from the report of forensic experts,” said the CBI official cited above.
If the purported conversation between Chandra and the public prosecutor is authenticated, CBI may ask the trial court to cancel the bail given to Chandra and slap fresh criminal charges against him, the official said.
On Tuesday, Unitech’s shares tumbled as much as 24.71% to Rs.26.35 in intraday trading on BSE. The stock recouped some of the losses and closed 17.86% lower at Rs.28.75. The benchmark Sensex rose 0.52% to 19,561.04 points.
Unitech and Norway’s Telenor ASA set up a telecom joint venture, Uninor, four years ago, but this fell apart after the 2G spectrum scam surfaced.
Chandra, also a director at Unitech Wireless, was in jail in 2011 for a while pending investigation into his suspected role in getting 2G telecom spectrum.
DB Realty Ltd’s promoters, Vinod Goenka and Shahid Balwa, were also in jail in the same case and all of them were released on bail around the same time at the end of 2011.
DB Realty shares shed 18.15% and closed at Rs.101.
“Corporate governance is of prime importance. Considering the negative events we have seen in recent years in the Indian corporate world, the scenario currently is that you are guilty until proven innocent, instead of the other way round,” independent analyst Ambareesh Baliga said.
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First Published: Tue, Feb 12 2013. 11 43 PM IST