The Indian defense ministry has threatened to carry out the “strongest action” if Finmeccanica acted corruptly in the sale of helicopters to the Indian air force (IAF).
The move follows the arrest in Italy of Finmeccanica chairman and CEO Giuseppe Orsi on Feb. 12 by investigators exploring whether AgustaWestland paid kickbacks worth around €50 million ($67 million) to secure the sale of 12 AW101 VIP helicopters to the IAF in 2010, when Orsi was in charge of the AgustaWestland division.
Finmeccanica has promoted COO Alessandro Pansa to take over for Orsi. He will serve as both COO and CEO.
The current head of AgustaWestland, Bruno Spagnolini, was placed under house arrest at the same time as Orsi.
India has opened its own investigation into the scandal and the purchase of the helicopters has reportedly been put on hold, with payments being withheld until the inquiry is complete.
Indian Defense Minister A.K. Antony says his ministry won’t allow corruption in any military deal and strong measures will be taken if the federal investigative agency detects bribery in the deal.
“We have requested CBI [Central Bureau of Investigation] for an early inquiry,” Antony says. “I can assure you that the moment we get a report from CBI, we will take [the] strongest action provided in the integrity pact ... that includes cancellation of the contract and blacklisting the companies. But before CBI’s report, I don’t want to jump to any conclusion.
“Under the terms of the integrity pact, if corruption is proved, then we can cancel the contract and get back whatever money that has been paid,” he says. “We are examining everything.”
He pointed out that in the recent past, the government had blacklisted six firms, four of which were “big” international companies. “Nobody will be spared,” he added.