Italy's Defense Giant Finmeccanica in the Dock

by on
Style:
Category:
Company News

Let us start by saying that we are not alleging anything untoward has taken place (before we are sued for libel); but in our defense, it couldn’t happen to two countries more stereotypically labeled as engaging in corrupt practices.

According to several articles in the FT, India was ready to cancel a $750 million contract to buy AW101 helicopters from Italy’s Finmeccanica – and it did – if investigators concluded that the deal was corrupt, the defense minister, Mr. A.K. Antony is quoted as saying.

Giuseppe Orsi, who’s already been replaced as chairman and chief executive, and Mr. Bruno Spagnoli, the head of Finmeccanica’s AgustaWestland helicopter unit, have been respectively arrested and placed under house arrest as part of an Italian investigation into allegations of bribes said to have been paid to intermediaries in the sale of 12 luxury helicopters to ferry Indian VIPs around the country.

Some say the timing is political, with only two weeks to the Italian elections and efforts to revive Finmeccanica said to be identified with Mario Monti’s technocrat government.

Finmeccanica is Italy’s second-largest industrial group after Fiat, and the allegations come on top of corruption allegations that have surfaced at Monte dei Paschi di Siena, the country’s third-largest bank by assets, as well as state-controlled energy group Eni and its Saipem subsidiary.

In India, Shashi Tyagi, a former Indian air force chief, is under suspicion after he was named in the preliminary report of the Italian investigation. He denies that he had changed the terms of India’s helicopter tender in order to favor AgustaWestland.

The maximum altitude requirement for the helicopters had been lowered in 2003 from 18,000 to 15,000 feet, because only one model of helicopter originally qualified and that was unsuitable for other reasons, Mr. Tyagi is quoted as saying.

To be continued in Part Two.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.