VVIP chopper scandal: Govt suspends payments to Italian firm Finmeccanica

VVIP chopper scandal: Govt suspends payments to Italian firm Finmeccanica
New Delhi The government has suspended payments to Italian defence giant Finmeccanica until the completion of a CBI probe, sources said, after allegations of corruption in the 4,000-crore deal for 12 helicopters for use by VVIPs like the Prime Minister. The Congress and the main Opposition party, the BJP, are trading charges over who is to blame.

Whether bribes were paid to Indian officials by representatives of AgustaWestland for the deal will be determined by a CBI investigation, sanctioned on Tuesday after the arrest in Italy of the CEO of defence giant Finmeccanica, Giuseppe Orsi. (VVIP chopper scam: how the deal was signed)

Agusta Westland is a subsidiary of Finmeccanica.

The Italian inquest says that in exchange for kickbacks, Air Chief Marshal SP Tyagi, who was in office from 2004 to 2007, altered the tender for the helicopters so that AgustaWestland would bag the deal. Rejecting those allegations, the former air force chief points out that the tender was changed in 2003, before he took over as Air Force chief, and that the deal was finalised and signed in 2010, three years after he retired. (Didn't alter contract for money, says ex-Air Force chief Tyagi)

The ruling Congress says that the tender was tweaked in 2003, when the BJP-led NDA coalition was in power with Brajesh Mishra as its National Security Advisor or NSA. The BJP counters that Mr Mishra asked for changes based on the advice of the Special Protection Group or SPG which guards the sort of VVIPs who are meant to use the choppers. The BJP also says the final deal was signed in 2010 by the Congress-led UPA government, which must accept responsibility and reveal the beneficiaries of the alleged swindle. (Read)

Defence Minister AK Antony said that "If we find any evidence of corruption then we will blacklist the company and even cancel the deal." He cautioned, "We don't want to jump the gun... (but) we can get our money back at any stage."

Italian investigators who arrested the Finmeccanica chief say that middlemen paid off former Air Force chief SP Tyagi through a trio of brothers who are his cousins.

"They promised and managed to pay, through brothers Julie Tyagi, Docsa Tyagi and Sandeep Tyagi, a certain amount of money, not yet quantified, to Air Chief Marshal Shashi Tyagi... to perform and for having performed a deed against his office duties," the report of the Italian prosecutors says.

The Italian inquiry says that  Indian officials lowered the altitude at which the VVIP helicopters were required to operate from 18,000 feet to 15,000 feet, which allowed AgustaWestland to qualify as a contender. Then,  an engine failure flying test was introduced. This favoured AgustaWestland as its helicopters were the only ones in the tender operating with three engines. (Foreign media on VVIP chopper scandal)

Story First Published: February 13, 2013 22:41 IST

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