The modus operandi in the AgustaWestland helicopter deal, in which an alleged middleman James Christian Michel has come under scrutiny for what is being touted as India's biggest defence scandal, has emerged from a verdict of an Italian court.
Even as India has moved Britain to get to the bottom of the deal with the Anglo-Italian helicopter maker, the order of an appeals tribunal in Milan went by a lower court's verdict over alleged wrong-doing of Michel with details of three questionable contracts.
"The wrongdoing of Michel consists of his entering into three contracts which had the scope of being legal conduits for making payments of an otherwise illicit nature to the Indians," said the Milan Appellate Court.
The contracts in question are the first in 2007 between AgustaWestland and IDS Infotech India for the provision of services by the Indian firm. The second, in February 2009, was signed between Agusta and IDS Tunisia, a subsidiary of IDS Infotech India, on the basis of a pre-existing contract between Agusta and IDS India.
The third contract is the one for subcontracting services to Chandigarh-based Aeromatrix which is being probed by Indian agencies and where two other Agusta middlemen -- Guido Haschke and Carlo Gerosa -- are partners.
Haschke in his deposition has explained the Tunisian subsidiary of IDS India as a way to transfer part of the funds out of Tunisia, which facilitates setting up of 100 percent export oriented units by giving them income tax exemption for 10 years.
These Tunisian companies can, therefore, even pay bills raised for non-existent operations abroad without breaking domestic law because they are not liable to pay taxes.
The Italian court cites the testimony of the legal representative of IDS Tunisia, Hedi Kamoun, to say that he never came across any employees of IDS India "except Aggarwal and Khaitan".
"The operations of the contracts are peculiar," the court said.
AgustaWestland would send, through their interface with IDS, "delivery report", which Kamoun would print out on a IDS letterhead and forward it to AgustaWestland with a copy to Aeromatrix.
"Praveen of Aeromatrix would then issue a work order for IDS, which Kamoun would print out on a IDS letterhead and send back to Aeromatrix," the court said.
"In practice there was a 'purchase order' from Agusta, a 'delivery report' of IDS Agusta and a 'work order' from IDS to Aeromatrix, that was invariably backdated. Clearly, this system worked backwards, moving from delivery of services to the order for the same," it added.
The court cited Haschke's testimony to say that Mauritius-based Interstellar would raise the bills for services on IDS Tunisia to transfer funds to Mauritius.
"The money transferred by AgustaWestland would, in part, go to Aeromatrix, and the rest (through IDS Tunisia) to Interstellar (in a Mauritius account in the name of Khaitan), which would raise the bill on IDS Tunisia to justify and account for the payment," it said.
--IANS
bc/vt
