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Saturday, November 27, 2021

Govt moves to lift procurement ban on firm linked to VVIP chopper scam

The official, who is from the Defence Ministry, stressed that the lifting of the ban was based on certain conditions the company will have to comply with.

By: Express News Service | New Delhi |
Updated: November 7, 2021 10:37:02 pm
As per a 2010 deal, subsidiary firm AgustaWestland International was supposed to supply 12 VVIP choppers.

The Union government has decided to lift the ban on dealings with Italian defence giant Leonardo SpA, earlier known as Finmeccanica, whose subsidiary had been involved in the alleged scam surrounding the Rs 3,500-crore VVIP chopper deal, a senior official said.

The official, who is from the Defence Ministry, stressed that the lifting of the ban was based on certain conditions the company will have to comply with. The main clause will be that the company cannot raise any commercial claims or file civil litigation against India for any of the earlier deals.

He confirmed that the ban on dealings with Leonardo SpA and its subsidiaries has been lifted.

As per a 2010 deal, subsidiary firm AgustaWestland International was supposed to supply 12 VVIP choppers. But in 2012, it was alleged that the company had paid bribes worth Rs 360 crore to Indian politicians, bureaucrats and Indian Air Force officers to swing the deal in its favour.

Even as the ban is removed, the investigations by the CBI and the Enforcement Directorate against the company will continue.

The removal of the ban comes just days after Prime Minister Narendra Modi met his Italian counterpart, Mario Draghi, during his recent visit to Rome on the sidelines of the G20 Summit on October 29.

The defence official, however, said that it would not be correct to link the two developments. He said any such decision involves deliberations by a high-level committee and consultation with various stakeholders, including the Law Ministry.

This official said that the meeting between the two leaders had just happened a week ago, and that the decision to remove the ban cannot happen so quickly.

Leonardo SpA had recently put in a request to lift the ban, after which the process had begun. The Italian government owns around 30 per cent of the company.

The ban on the company had also impacted Indian forces, which have been interested in some products, besides the VVIP choppers, produced by Leonardo SpA. The foremost of such products is the Black Sharp heavyweight torpedo to be used in the Scorpene submarines which are being produced in India. Additionally, the company also produces radars, electronic warfare suits, and communication systems, some of which are of interest to the Indian military.

After the VVIP chopper deal scam, the government had cancelled in 2016 a deal with a Leonardo SpA subsidiary to acquire 98 Black Shark torpedoes for the French Scorpene Class submarines being built at Mazagon Dockyards Ltd. The search for a replacement has been on since.

Leonardo SpA is one of the 15 companies under the “put on hold/ suspended” list — from which procurement is not allowed — as of September 29.

The order to ban Leonardo SpA and AgustaWestland was issued in July and August 2014. The ban was renewed in 2019. There are six other firms which are “debarred” and two firms which fall under the “restricted procurement” category.

The CBI case in the AugustaWestland deal is still going on. The agency had registered cases against former Air Force Chief Air Chief Marshal SP Tyagi. Italian prosecutors had alleged that Tyagi had tweaked the specifications of the tender to help AgustaWestland, and had received bribes through his cousins.

The CBI has also filed cases against former Chief Executive and Chairman of Finmeccanica SpA, Giuseppe Orsi, who was arrested in Italy in 2013. According to the warrant, he was charged with paying bribes of Rs 360 crore to intermediaries to secure the sale of the helicopters to India when he was head of the group’s AgustaWestland unit.

The CBI has also registered a case against middleman Guido Ralph Haschke, who allegedly received €51 million from AgustaWestland, and was arrested in Switzerland in 2012.

AgustaWestland had signed a contract in 2010 worth Rs 3,546 crore to supply 12 AW-101 helicopters to the Air Force, of which eight were to be used to transport VVIPs such as the President, the Prime Minister, the Vice President and others. The remaining four would be for other duties.

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