VVIP chopper scam: Italy arrests CEO for paying bribes in Indian deal

New Delhi, Feb 12: In a significant development, the head of Italian company Finmeccanica has been arrested in Milan in connection with charges that bribes were paid to secure an Indian defence helicopter deal worth Rs 3600 crore.“Giuseppe Orsi, the head of Italian defence and aerospace giant Finmeccanica, was arrested on Monday in relation to a probe into international corruption. He is suspected of involvement in the payment of bribes regarding the sale to the Indian government of 12 helicopters produced by Finmeccanica's subsidiary AgustaWestland,” Italian news agency Ansa said.The 2010 deal has been under the scanner for more than a year now after Italian media reports suggested the arrest of two alleged middlemen in Europe for paying bribes to secure the deal.The first three of the 12 AgustaWestland VVIP choppers have already arrived in India and the rest are expected to be supplied to the IAF by the middle of next year.The Defence Ministry here is awaiting details from Rome after which it will act accordingly, sources said.After the arrest, the Italian firm said in a statement that “Finmeccanica expresses support for its Chairman and CEO, with the hope that clarity is established quickly, whilst reaffirming its confidence in the Judges.”It added, “With reference to the precautionary measures issued today towards the Chairman and CEO of Finmeccanica and the CEO of the controlled Company AgustaWestland, Finmeccanica confirms that operating activities and ongoing projects of the Company will continue as usual.” The Italian firm had pipped American Sikorsky to bag the Rs 3,600 crore deal.In February 2010, India had inked the deal to acquire the 12 three-engine AW-101 helicopters from AgustaWestland for IAF's elite Communication Squadron, which ferries around the President, PM and other VVIPs.Despite initial objections from the finance ministry, the Cabinet Committee on Security (CCS) had cleared the deal in 2010.Defence Minister A K Antony had then said, “IAF and SPG repeatedly told us the helicopters were required because of the changing security scenario... the finance ministry also agreed later. The CCS then took a considered decision.”As per earlier media reports, “slush money” allegedly generated by Finmeccanica through arms contracts was used to bribe Italian political parties. The Indian VVIP helicopter deal has also come in for some mention in the reports.After the allegations came to light, India had sought reports from the Italian investigators about their probe in the issue but no specific details were provided to it.In Parliament, Defence Minister A K Antony had said that if any wrongdoing is found in the case, “suitable penalty measures” will be taken by the Ministry.Antony had said the Defence Ministry was pursuing the matter and committed to take suitable penalty measures in event of allegations being substantiated.“However, in absence of any specific information in this regard, government has not ordered any formal inquiry into the case so far,” he said. AP adds from Milan: Italian police on Tuesday arrested the chief executive of Italy's largest defence and aerospace group as part of an investigation into alleged international corruption. Finmeccanica CEO Giuseppe Orsi is alleged to have paid $670 million in bribes for the sale of 12 helicopters to the government of India. Prosecutors in the Busto Arsizio north of Milan ordered a search of Orsi's home, as well as the headquarters of Finmeccanica's AgustaWestland helicopter division. Authorities also ordered the house arrest of AgustaWestland CEO Bruno Spagnolini. Finmeccanica, which is 30-per cent government owned and once considered a jewel among Italian companies, said in a statement that the company will continue operating as usual and expressed support for the executives. The statement called the measures against Orsi and Spagnolini “precautionary.” Orsi has repeatedly denied paying any bribes. The company and its executives have been the target of a wide-ranging investigation into alleged corruption in the awarding of international contracts. Mr. Orsi replaced the former CEO who resigned under government pressure.