February 27, 2013
India’s parliament plans to investigate allegations of bribery in the purchase of AgustaWestland AW101 helicopters, on top of the ongoing defense ministry-led probe into the deal.
News of the probe comes as the U.K.-based subsidiary of Finmeccanica is demanding New Delhi furnish solid proof that it bribed officials to win the 12-aircraft, $750 million deal originally signed in 2010. India has suspended all payments and threatened to cancel the purchase altogether if the charges of bribery to middlemen both in India and abroad are proven.
The defense ministry already ordered a probe by the Central Bureau of Investigation that should be complete in the coming months, Defense Minister A.K. Antony says.
In a detailed reply to India’s show-cause notice on terminating the deal, AgustaWestland insists that the contract cannot be canceled on the basis of “adverse media speculations.” The company already has delivered three helicopters and says it expects India to continue making payments for the remaining nine.
“As you are aware, three helicopters together with associated spares, support equipment, training and technical publications have finally been accepted in accordance with the contract,” AgustaWestland says. “The company is continuing to perform the contract so as to deliver the remaining aircraft and expect to be paid in a timely manner.
“You will appreciate that such a pre-emptory course of action would result in unjustified harm to the worldwide good name and reputation of AgustaWestland and cause it to incur substantial financial losses,” the company says.
The company argues that “its conduct has been fully compliant with the rules which regulate the AW101 helicopters contract signed with India,” and notes that the contract was awarded following a comprehensive technical and flight evaluation of competing types performed by the Indian air force in accordance with India’s defense 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 on different occasions,” AgustaWestland says.
Antony says the government will get to the root of any scams involving public money and punish the guilty. “I feel ashamed as a minister on any controversy surrounding the defense ministry. My ministry has acted on every complaint it received [regarding any deal] and there is no cover-up,” he tells parliament.