Chopper firm responds over scandal-hit deal

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Italian prosecutors suspect around €50 million was paid to Indian officials in the helicopter deal. Photo: USACE HQ/Flickr
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AgustaWestland, the Italian-British helicopter-maker, has submitted its response to India's Ministry of Defence in relation to exceptions raised over a scandal-tainted helicopter deal, the company's CEO Daniele Romiti told The Local.

The company has sought arbitration in a bid to salvage the €553 million deal that was suspended earlier this year over corruption allegations.

India suspended the contract to supply 12 luxury VIP helicopters after Italian investigators began looking into accusations that AgustaWestland paid bribes to win the deal.

In October, the country moved to cancel the contract by issuing a "final show cause notice" to the company, asking why action should not be taken against it for allegedly violating the terms of the integrity pact.

Romiti said a formal response to the exceptions raised by India's Ministry of Defence was submitted earlier this week.

AgustaWestland said in a statement earlier this month that it had sought arbitration by a "well-known" Indian judge of "unimpeachable experience and reputation" to settle the disagreement.

Arbitration is provided for under the deal contract between India and AgustaWestland, a unit of Italy's Finmeccanica.  

AugustaWestland also met with Indian officials on November 20th. The meeting came amid media reports that the Indian government has already decided to cancel the deal, citing violations of a so-called "integrity pact" that must be signed by defence suppliers.

Italian prosecutors suspect kickbacks worth around 10 percent of the deal - €50 million - were paid to Indian officials to swing it in favour of AgustaWestland, according to Italian media reports.

The Italian boss of Finmeccanica was arrested in February over the case and put on trial - touching off a firestorm in India, where the Congress-led government has been battling a string of graft scandals ahead of elections next year.

Finmeccanica said on November 20th that it had received "no such communication" about cancellation of the order from the defence ministry and dismissed "all allegations of violation of the pre-contract integrity pact".

"Finmeccanica is confident in India's reputation for fair and transparent proceedings and respect for the rule of law, for which India has an established reputation," the company said in a statement.

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India signed the deal in 2010 for the dozen helicopters with AgustaWestland, fending off competition from US, Russian and European rivals.

Any cancellation of the agreement could see the contract re-tendered and result in hefty losses for AgustaWestland.

India has already received three of the helicopters, but Defence Minister A.K. Antony halted deliveries of the remaining nine in February.

India's auditor general said in an August report that the defence ministry "deviated from procurement procedure and tender on several instances in the deal", including altitude requirements.

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