Michel signed ‘sham contracts’ to hide trail of Agusta kickbacks: ED

Several “service contracts” signed between British middleman Christian Michel and his main client AgustaWestland were “sham contracts” to camouflage alleged kickbacks from the Rs 3,600-crore helicopter deal in India, according to documents submitted in court by the Enforcement Directorate (ED).

In its prosecution complaint, the agency said that these were meant to “create a legal facade and to route the kickbacks” under these agreements. And “create a smokescreen” between these contracts and the chopper purchase making it hard to track the payoff trail.

Michel’s interrogation report, accessed by The Indian Express, details his version of these deals, and his turbulent career graph in India — from his father Wolfgang Michel’s support to start in 1985 to how he nearly shut shop after the Pokhran tests of 1998; from signing up for the VIP helicopter deal in 2006 to finally clinching it in 2010.

The report reveals the mistrust between Michel and Guido Haschke, the other alleged middleman for AgustaWestland, and the admission that his deals with the Italian company made up 80 per cent of his Dubai firm’s revenue. Michel told investigators that the AgustaWestland controversy grounded several of his plans in India, including a proposed joint venture with the Tatas.

December 4, 2021, marked three years since Michel was extradited from Dubai. Other key findings from the interrogation report were reported by The Indian Express over the past two days: Michel’s claims about how he lobbied with the then UPA Government to salvage the chopper deal that was sealed in 2010 and about an intervention by US Secretary of State Hillary Clinton.

The report also shows that on December 26, 2018, Michel told investigators that he was introduced to Haschke in the AgustaWestland boardroom in Italy. “I had heard that Haschke was claiming that he managed the reduction in the height (which was one of the specifications) through his contacts….he stated that his contacts were the Tyagi brothers,” Michel said, referring to former IAF chief SP Tyagi, who served a jail term in the case, and his cousin Julie Tyagi.

On his deals with AgustaWestland, records show that Michel admitted to signing a post contract service agreement for the VIP choppers, adding that the Ministry of Defence was not informed about it — at least till the deal was signed.

According to Michel, AgustaWestland was responsible for 80 per cent turnover of his flagship company in Dubai, Global Services FZE. But a major stumbling block was the 1991 grounding of WG30 helicopters operated by Pawan Hans after two of them had crashed.

Michel told ED he signed a contract with AgustaWestland through Gufic General Trading for shipping out 14 grounded helicopters, allegedly making a 45 per cent profit.

Michel described his visit to the Pawan Hans hangars in Mumbai, where “the aircraft were…totally stripped of all equipment”. “They were in quite a mess and there was absolutely no chance of these ever flying. They were distorted,” he said.

Questioned about the Euro 18.2 million price for the buyback deal, he replied: “The price of the aircraft was a combination of knowing what Westland would have paid when there was not much reputation to lose and what I thought the brokers were going for. The rest was guess work.”

Balance sheets provided by auditors have confirmed that AgustaWestland paid Michel Euro 18.2 million for the contract.

In its complaint, the ED states: “…investigation has proved without doubt that the WG30 helicopters were never repurchased and shipped from India to the UK and are still lying in India. It is amply clear that no service was rendered under this agreement and payment of Euro 18.2 million was made without any corresponding service.”

Records show Michel detailing his first major project for AgustaWestland: providing critical spares, mainly gear boxes, for the Indian Navy’s Sea King fleet in 2003. But this was hit by the post-Pokhran sanctions, he said.

According to the interrogation records, Michel told the ED: “I had an idea how to restart the business as a majority of the Sea Kings were grounded due to the US embargo. I was preparing a strategy for Westland to re-enter the market, recover the aircraft and transfer all required technology to India to prevent any possibility of embargo again. I was paid 3% of the total price of the spare parts sold by Westland Helicopters.”

In all, he said, three such spare parts contracts were signed when, according to his assessment, 70 per cent of the helicopters’ life had been unused due to lack of flying.

“This (the Sea king recovery deal) saved Westland from exiting the Indian market and created a new business and saved India millions of pounds… All Navy business is separate and very genuine…the Navy work in between 2003-2007 was among the best work I ever did,” Michel told the ED.

Michel claimed he lost out on projects in India due to the bribery case, including Indian Rotorcraft, a proposed joint venture with the Tatas for manufacturing helicopters and components. He said it took four years for the project to be mounted in 2012 before it was “suspended” (due to the bribery case). Michael was confronted with a statement of Tata officials wherein they denied they had any “relationship” with AugustaWestland.

Ritu Sarin

Ritu Sarin is Executive Editor (News and Investigations) at The Indian Express group. Her areas of specialisation include internal security, money laundering and corruption. Sarin is one of India’s most renowned reporters and has a career in journalism of over four decades. She is a member of the International Consortium of Investigative Journalists (ICIJ) since 1999 and since early 2023, a member of its Board of Directors. She has also been a founder member of the ICIJ Network Committee (INC). She has, to begin with, alone, and later led teams which have worked on ICIJ’s Offshore Leaks, Swiss Leaks, the Pulitzer Prize winning Panama Papers, Paradise Papers, Implant Files, Fincen Files, Pandora Papers, the Uber Files and Deforestation Inc. She has conducted investigative journalism workshops and addressed investigative journalism conferences with a specialisation on collaborative journalism in several countries. ... Read More

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Michel signed ‘sham contracts’ to hide trail of Agusta kickbacks: ED

🔴 The report reveals the mistrust between Michel and Guido Haschke, the other alleged middleman for AgustaWestland, and the admission that his deals with the Italian company made up 80 per cent of his Dubai firm's revenue.