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India moved a step closer to scrapping the deal to buy 12 AgustaWestland helicopters, with the Ministry of Defence (MoD) sending a notice to Italian defence major Finmeccanica, asking if it had violated clauses of the contract by giving bribes of Rs 300 crore.
“The defence ministry issued a formal showcause notice to AgustaWestland, seeking cancellation of the contract and taking other actions, according to the terms of the contract,” a defence ministry spokesman said. The company has seven days to reply.
The notice comes a day after the ministry warned of legal action, including invoking the integrity pact that provides for cancellation of the contract if bribes were paid, and recovery of the money paid. India has received three of the 12 helicopters and paid up to 30 per cent of the Rs 3,600-crore deal.
Finance Minister P Chidambaram, and other ministers, will address a press conference tomorrow to detail the steps taken by the government in this matter.
Giuseppe Orsi, the man under whose watch the deal took place and who is now in jail in Italy, today resigned as chairman of Finmeccanica, reports from Milan said.
There is no clarity on the Indians who had got the bribes or how the money was routed.
Reports in the Italian press, based on the prosecution’s case there, said Indian companies IDS India and Aeromatrix, hived off from Chandigarh-based IDS Infotech in 2009, and foreign company IDS Tunisia, were used as fronts to route the bribes. The whereabouts of IDS India are not known.
Speaking to Business Standard, IDS Infotech Chairman Satish Bagrodia said, “The prosecution documents mentioned the names of IDS India and IDS Tunisia as the firms through which bribes were routed. We are not at all related to these companies, so a question of involvement does not arise. These two companies are not owned by us. As far as Aeromatrix is concerned, it was hived off from IDS Infotech in 2009.”
Established in 1989, Chandigarh-based IDS Infotech Ltd, an information technology provider with interests in legal, healthcare and engineering services, caters to customers in the aerospace, automotive, machinery, and affiliated industry segments. The company had a revenue of Rs 50 crore in 2007-08.
A news item dated June 23, 2008, posted on the company’s website states the company’s aerospace business happened by chance and it worked with AgustaWestland. It says, quoting Managing Director Partap Aggrawal, “We were doing IT solutions for French major Dassault Aviation in 2002, when they suggested we do design engineering for them. Two years later, we took up aerospace as a full-scale vertical.”
IDS Infotech has since made prototypes for companies manufacturing parts for Airbus and Boeing, medium sized-plane companies Fokker and Embraer, Italian helicopter company AgustaWestland and, of course, Dassault Aviation, which makes Mirage fighter jets.
The other company based in Chandigarh, Aeromatrix Info Solution (P) Ltd, is an engineering and design support services organisation and caters to aerospace, automotive, general engineering and heavy machinery manufacturing companies worldwide. The company has a turnover of Rs 8.5 crore and has a manpower of 60-70.
The chief executive officer of Aeromatrix, Praveen Bakshi, who has been named by the Italian courts as a beneficiary in the AgustaWestland deal, could not be contacted despite attempts.
However, a senior official of the company said on condition of anonymity, “Our CEO has already clarified on the issue. Earlier, in an interaction with certain media channels, he denied any involvement in the matter. Moreover, till now, we have not been contacted by any law enforcement agency.”
The political reactions to the deal were interesting. The Bharatiya Janata Party (BJP) did not seek the resignation of Defence Minister A K Antony or any functionary in the government. It sought a Special Investigation team (SIT) that would report to the Supreme Court, saying it had no faith in the Central Bureau of Investigation (CBI).
In 2012, the party had targeted the then home minister, P Chidambaram, in the House and started a campaign against him for his alleged involvement in the 2G scam.
On the involvement of BJP’s party functionaries in the helicopter deal, senior functionary Prakash Javadekar said: “The government is dragging the name of NDA into the scam. The issue is not about technical specification but the real issue is the corruption and the kickbacks. The Union government failed to order a timely probe and find out the Indian beneficiaries from the deal. The government should clarify who had finalised and signed the VVIP chopper deal and who received kickbacks in the deal,” said Prakash Javadekar, senior BJP leader.
The government has gone into a huddle. Defence ministry mandarins, along with air force and army officers, made a presentation to the CBI. The CBI investigative team is trying to understand the policy matteer in this case and if any norms were flouted to cause loss to the government, a senior CBI official said. The investigative agency, before taking any action, needs to know if a government official or agency was involved in any wrongdoing. It also needs to establish facts about the role of Indian entities first hand, instead of relying on the Italian documents handed over to it by the defence ministry. CBI has registered a complaint on the reference of the defence ministry. It plans to sent a team to Italy within a week.
CBI would register a preliminary enquiry soon, during which it will question government and private firms’ officials, and hear their views. The agency would then register an FIR based on the findings.
The senior official also pointed out that if there was enough material, CBI can lodge an FIR directly in this case, which then gives it the authority to conduct raids and searches.
