Question: Will the Minister of DEFENCE be pleased to satate :-

(a) whether head of the Finmeccanica company has been arrested in Italy in connection with graft allegations in sale of VVIP helicopters to the Indian Air Force recently;

(b) if so, the details thereof;

(c) whether Government would initiate fresh inquiry into the alleged bribery and irregularities in VVIP helicopters deal in view of recent arrest in Italy and fix responsibility in this regard;

(d) if so, details thereof; and

(e) if not, the reasons therefor?

Answer: Minister of Defence (Shri A.K. Antony)

As per media reports, Mr. Giuseppe Orsi, the Chief of M/s Finmeccanica, parent Company of M/s Agusta Westland, U.K. has been arrested in Italy for alleged wrong doing and unethical conduct by M/s Finmeccanica including alleged payment of kickbacks/bribes by the Company in connection with the procurement of 12 VVIP/VIP helicopters for the Indian Air Force (IAF).
On the report of the arrest of the Finmeccanica Chief, Ministry of Defence immediately asked the CBI on February 12, 2013 to conduct an inquiry into the matter. The CBI, after a visit of its team to Italy and on further examination of the documents available, has registered a Preliminary Enquiry (PE) on February 25, 2013 in this matter against eleven persons including five Indians and four firms which include two Indian firms.
A Show Cause Notice has also been issued to M/s Agusta Westland, U.K. on February 15, 2013 in terms of the Contract and the Integrity Pact asking them to explain as to why action should not be initiated for cancellation of the contract and recovery of all payments made by the buyer on account of the violation of the terms of the Contract and the Integrity Pact and any other action as may be appropriate. The company was also informed of the decision to put the operation of the contract on hold and stoppage of all further payments. The Company has submitted their reply to the show cause notice on the 21st February, 2013 on which follow-up action has been initiated.
The Government is determined to enforcing the terms of the Contract and the Integrity Pact and taking all possible legal and administrative actions against the guilty parties and persons.

Defence Acquisition

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